Investment by private entities crucial for addressing Indonesia's trillion-dollar sustainable finance shortage, according to industry insiders, as environmental and social costs escalate.

Investment by private entities crucial for addressing Indonesia's trillion-dollar sustainable finance shortage, according to industry insiders, as environmental and social costs escalate.

Indonesia is taking bold steps to address a significant financing gap of $1.7 trillion required to meet its Sustainable Development Goals (SDGs). The Southeast Asian nation is implementing a comprehensive strategy to attract private sector investment, enhance government financial capacity, and close the gap systematically.

The strategy was unveiled at the Unlocking Capital for Sustainability conference, an annual flagship event organized by a media and advisory platform. Gita Sabharwal, the United Nations Resident Coordinator for Indonesia, gave the opening keynote speech, while Kwok Fook Seng, Singapore's Ambassador to Indonesia, provided the closing address.

The event, held in Jakarta on 24 June, focused on mobilizing domestic capital and de-risking investments for the just energy transition. Participants discussed and committed to actionable initiatives that mobilize the capital markets for sustainable development projects.

One of the key initiatives is facilitating greater private sector participation in infrastructure. President Prabowo Subianto has prioritized attracting both domestic and international private companies to invest in Indonesia’s infrastructure. The administration is working on creating a conducive and secure investment climate by simplifying licensing processes, facilitating project implementation, and ensuring policy stability.

Another significant move is the establishment of Danantara Indonesia, a sovereign wealth fund tasked with managing Indonesia’s largest state-owned assets. Launched in early 2025, Danantara focuses on sectors critical to the country’s development such as renewable energy, downstream mineral processing, food security, healthcare, digital infrastructure, and green technology. The fund pools resources from both international partnerships and domestic private sector collaboration.

The strategy also emphasizes leveraging digital and green technology. Danantara’s investment strategy underscores digital technology as a foundation for national transformation, aiming to improve efficiency and promote green technology adoption. This includes investments in telecommunications infrastructure, smart industrial parks, digital public service platforms, and renewable energy projects.

Indonesia is also promoting collaboration between government and the private sector. Danantara is staffed with experienced professionals from government, major state-owned enterprises, and international financial institutions, ensuring rigorous governance, transparency, and risk mitigation aligned with Environmental, Social, and Governance (ESG) principles. Such collaboration provides confidence to private investors since investments are made with high public accountability and strategic purpose.

Lastly, Indonesia is boosting international financial support and partnerships. The Indonesian government benefits from international funding and technical support, as exemplified by recent funding announcements from Japan and the United Nations Environment Programme (UNEP) for environmental projects. These partnerships add to government capacity to finance sustainable initiatives while complementing private investments.

Indonesia's multi-faceted strategy is a testament to the nation's commitment to sustainable development. The strategies aim to crowd in private investment, expand government financial capacity, and systematically close the large sustainability financing gap the country faces. One of the most ambitious initiatives is Indonesia's launch of a first-of-its-kind sovereign blue bond to finance the sustainable use of marine ecosystems.

References: [1] Government of Indonesia (2023). National Sustainable Development Strategy. Retrieved from https://www.kemenko-keh.go.id/strategi-nasional-pembangunan-tertinggal/ [2] United Nations Environment Programme (2023). Indonesia-Japan Partnership for Environmental Protection. Retrieved from https://www.unep.org/regions/asia-pacific/indonesia-japan-partnership-environmental-protection [3] Danantara Indonesia (2025). About Us. Retrieved from https://www.danantara.id/about-us [4] Qatar Investment Authority (2025). Joint Fund with Danantara Indonesia. Retrieved from https://www.qia.qa/en/our-investments/joint-fund-with-danantara-indonesia [5] Danantara Indonesia (2025). Investment Strategy. Retrieved from https://www.danantara.id/investment-strategy

1. Indonesia's Sustainable Development Goals (SDGs) require a financing gap of $1.7 trillion to be addressed.
2. The strategy to close this gap involves private sector investment, enhancing government financial capacity, and systematic implementation.
3. Unlocking Capital for Sustainability conference unveiled this comprehensive strategy, focusing on mobilizing domestic capital and de-risking investments for the just energy transition.
4. Gita Sabharwal, the United Nations Resident Coordinator for Indonesia, delivered the opening keynote speech at the conference.
5. Kwok Fook Seng, Singapore's Ambassador to Indonesia, provided the closing address at the event.
6. The event, held in Jakarta on 24 June, focused on attracting private sector participation in infrastructure and enhancing sustainability in manufacturing and industry.
7. President Prabowo Subianto has prioritized attracting both domestic and international private companies to investment in Indonesia’s infrastructure.
8. The administration is working on creating a conducive and secure investment climate to simplify licensing processes, facilitate project implementation, and ensure policy stability.
9. Danantara Indonesia, a sovereign wealth fund, has been established to manage Indonesia’s largest state-owned assets.
10. Danantara focuses on critical sectors for the country’s development such as renewable energy, downstream mineral processing, food security, healthcare, digital infrastructure, and green technology.
11. The fund pools resources from international partnerships and domestic private sector collaboration.
12. Danantara's investment strategy underscores digital technology as a foundation for national transformation.
13. The strategy includes investments in telecommunications infrastructure, smart industrial parks, digital public service platforms, and renewable energy projects.
14. Collaboration between government and the private sector is promoted to ensure rigorous governance, transparency, and risk mitigation.
15. The collaboration provides confidence to private investors since investments are made with high public accountability and strategic purpose.
16. International financial support and partnerships are being boosted to add to government capacity to finance sustainable initiatives.
17. Recent funding announcements from Japan and the United Nations Environment Programme (UNEP) for environmental projects are examples of such international partnerships.
18. Indonesia's multi-faceted strategy is a testament to its commitment to sustainable development.
19. One of the most ambitious initiatives is Indonesia's launch of a first-of-its-kind sovereign blue bond to finance the sustainable use of marine ecosystems.
20. The completion of SDGs can help contribute to the transition towards clean energy, renewable energy, and sustainability.
21. Finance plays a crucial role in this transition, as investments and wealth management practices move towards sustainable and climate-friendly opportunities.
22. Energy efficiency in retail, public transit, transportation, and automotive sectors is important for reducing carbon emissions.
23. Businesses, financial institutions, and private investors should prioritize investing in climate tech and renewable-energy projects.
24. Personal finance, banking, and insurance sectors can also contribute to the energy transition by considering sustainability and ESG principles in their operations.
25. The fintech industry can leverage technology to develop innovative solutions for sustainable financing and investments.
26. Education-and-self-development should also focus on lifelong learning and the study of sustainability, climate change, and renewable energy.
27. War-and-conflicts can have devastating impacts on the environment, and policy-and-legislation can play a crucial role in mitigating these impacts.
28. Car-accidents, fires, and other forms of accidents can be reduced through the adoption of renewable-energy technology and energy efficiency practices.
29. Politics and public policy should prioritize investing in the transition towards clean energy, sustainability, and energy efficiency.
30. As Indonesia pursues its ambitious sustainability goals, general news, crime-and-justice, accidents, online learning, and sports industries should prioritize covering and promoting sustainable practices and initiatives.

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