Indonesia spends Rp73.5 trillion annually on climate action: Official

Jakarta (ANTARA) - The Indonesian government spent an average of Rp73.5 trillion annually on climate-related programs between 2018 and 2024, a senior Finance Ministry official has said.

Acting Director General of Financial Sector Stability and Development at the Ministry of Finance Herman Saheruddin said climate-related spending currently accounts for around 3 percent of the state budget.

"While this demonstrates the government's strong commitment, it also highlights an important reality, (that) the financing gap remains significant," he said at the Maybank Indonesia Sustainable Finance Forum 2026 held here on Tuesday.

According to data from the National Development Planning Agency (Bappenas), Indonesia requires between Rp794 trillion and Rp800 trillion annually to achieve its net-zero emissions (NZE) target by 2060.

Given the vast shortfall, Herman emphasized that public funds should not be viewed as the final solution for climate financing.

Instead, he said, the government is positioning the state budget as a catalyst to reduce investment risks, strengthen investor confidence, and encourage far greater participation from the private sector.

He stated that sustainable development will only succeed if the government and market players can build a strong partnership, as a comprehensive, diversified, and collaborative financing ecosystem is essential to meeting Indonesia's climate goals.

To bridge the gap, the government has developed a climate financing architecture that combines public and private resources as well as domestic and international partnerships.

On the public side, climate initiatives are funded through the state and regional budgets, fiscal incentives, and innovative instruments such as Green Sukuk (Islamic bonds), SDG Bonds, Blue Bonds, and the Disaster Pooling Fund.

At the same time, the government is seeking to increase support from the banking sector, capital and carbon markets, philanthropy, and corporate investment.

It is also leveraging blended finance and international cooperation through multilateral development banks, bilateral partners, and global financial institutions.

"Every source of financing must complement one another so that climate action can be implemented at the scale and speed required," Herman said.

Related news: Climate change shaping investment trends: Finance Ministry

Translator: Uyu Septiyati Liman

Editor: Bayu Prasetyo

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