KfW supports German-Indonesian climate initiative with investments of up to EUR 2.5 billion

By Reconstruction Credit Institute

KfW supports German-Indonesian climate initiative with investments of up to EUR 2.5 billion

Over the next five years, KfW plans to make EUR 2.5 billion available for infrastructure measures in Indonesian cities under the German-Indonesian climate initiative on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), thereby helping Indonesia to achieve its ambitious climate targets.

The planned projects will be carried out in the areas of urban mobility, waste management, wastewater, and water supply. These activities include the construction and expansion of suburban railway systems and better transport links between the periphery and the city centres of densely populated areas through energy-efficient commuter trains, the construction of landfills and waste incineration plants, the construction of modern sewage treatment plants, and the expansion of water supply systems.

Reducing car traffic and the resulting air pollution, reducing and recycling waste, and thus also lowering the amount of waste entering the oceans will sustainably improve the living conditions of local populations.

“Indonesia is among the countries with the highest CO2 emissions in the world. That is why green infrastructure is also the key to the country’s sustainable economic growth and development. We are supporting Indonesia in its efforts to achieve the Paris climate targets and to launch climate change mitigation and adaptation measures. The innovative projects that receive funding are part of an extensive transformation of Indonesia’s infrastructure in the areas of transport, waste management, water supply, and sanitation,” said Dr. Günther Bräunig, Chief Executive Officer of KfW Group.

As one example, the suburban railway in Surabaya, Indonesia’s second-largest city, will be expanded, with EUR 230 million earmarked for this project. The planned 120 kilometres of rail network are intended to connect as many as 500,000 people to sustainable local public transport and at the same time save up to 100,000 tonnes of CO2 per year. Work is already underway to improve the water supply for 450,000 inhabitants in four cities in Central Java for around EUR 90 million. KfW also intends to provide EUR 200 million in support of Indonesia’s action plan to reduce plastic waste in the ocean by 70 %. Some projects of the climate initiative are part of the Clean Oceans Initiative which was established in 2018 and aims to reduce plastic waste in the oceans. These and other measures will save 4 million tonnes in CO2 emissions annually.

Since 2011, climate-related measures with a volume of EUR 1.4 billion have already been agreed with Indonesia.