AIIB and KfW expand climate resilience cooperation in Indonesia

The Asian Infrastructure Investment Bank (AIIB) and Germany’s KfW Development Bank have agreed to strengthen their cooperation in support of Indonesia’s Climate Adaptation and Green Resilient Program, Sub-Program 1, according to a press release issued on October 28, 2026. Ludger Schuknecht, AIIB Vice President for Policy and Strategy, and Brigitte Réthier, Member of the Executive Board of KfW, signed a memorandum of understanding on the sidelines of the 2026 IMF and World Bank Group Annual Meetings in Bangkok. The agreement establishes a framework for both institutions to coordinate their engagement with the Government of Indonesia. It also underscores a shared commitment to Indonesia’s climate policy reform agenda. The partnership aims to accelerate reforms and mobilize investment for climate resilience and sustainable development.

The program supports Indonesia’s efforts to strengthen climate resilience and adaptation while promoting sustainable growth through policy and institutional reforms. These reforms cover climate-smart agriculture, irrigation management, village financing and social forestry. They also address mangrove protection, environmental management and ecosystem services. Additional areas include climate-resilient subnational financing, solid waste management and water supply. The program, known as CARE CPBF, is coordinated by Indonesia’s Ministry of National Development Planning (Bappenas).

The Government of Indonesia leads the design and implementation of the reforms. AIIB and KfW provide support through policy dialogue, technical assistance and coordinated financing. Under CARE CPBF Sub-Program 1, AIIB is providing USD500 million in policy-based financing. KfW aims to provide EUR300 million. The combined contribution reflects the complementary roles of both institutions in supporting Indonesia’s reform priorities.

“This partnership brings together the complementary strengths of AIIB and KfW in support of Indonesia’s climate policy reform agenda,” Schuknecht said. He added that the financing can help accelerate the implementation of critical reforms and mobilize investment. He also pointed to KfW’s deep country knowledge, longstanding engagement in Indonesia and technical expertise. “Together, we can provide coordinated financing, policy dialogue and technical assistance to help Indonesia advance climate resilience and sustainable development,” he said. Réthier noted that KfW is pleased to contribute its decade-long experience in forest protection projects in Indonesia.

Réthier stated that the reforms supported by the two banks will be highly beneficial for Indonesia, particularly in creating an enabling environment for climate-resilient investments and ecosystem protection. She described the partnership as a reflection of KfW’s responsibility to address global challenges such as climate change and strengthen international relations. AIIB began operations in 2016, has 111 approved members worldwide and is capitalized at USD100 billion. KfW Development Bank implements projects in developing countries and emerging economies on behalf of the German Federal Government. The cooperation marks a coordinated step by both institutions to advance Indonesia’s climate resilience objectives.