Blended finance key unlock for business & investment in people and planet

I applaud the Government of Indonesia and the Tri Hita Karana Forum for their visionary leadership in launching the Global Blended Finance Alliance here in Bali on the occasion of the G20. It comes not a moment too soon.

Governments today are besieged with multiple crises – conflict, inequality, climate change, health, rising energy and food costs, unsustainable debt levels and more. We know that to address these challenges, we must invest in real solutions, not just treat symptoms. The roadmap for this investment is the UN Sustainable Development Goals.

But to realise the promise of the SDGs will require an unprecedented investment of an additional $4 trillion per year, according to some estimates. An investment programme of this magnitude will not only tackle climate change. It can create jobs, build resilience to physical and economic shocks and drive sustainable growth.

To capture these benefits, we will need to crowd in trillions of private capital alongside the billions of official development assistance provided by donor governments. This is exactly what the Global Blended Finance Alliance intends to do by creating new private-public mechanisms to deploy capital at scale and by replicating solutions that already work. This is key if we want to move fast and mobilise the investment needed to meet global climate targets, protect nature and tackle inequality. The Alliance will play a crucial role in reducing the time and transaction costs of launching and implementing blended finance solutions.

It will help pilot, standardise, streamline and scale successful structures, so that Alliance members don’t have to reinvent the wheel every time. This will create a set of practices to ensure blended finance mechanisms are fit-for-purpose for the countries and communities where they are used.

Building on Indonesia’s demonstrated track record in launching blended finance models like the $3bn “SDG Indonesia One” platform for sustainable infrastructure, the Alliance will work with public and policy partners like the OECD, the ADB and the World Bank as well as institutional investors, developers and thought leaders to unlock capital for people, planet and prosperity. There is enormous potential to tap into private finance to help build the world we want, and the Global Blended Finance Alliance can lead the way.

SDG Indonesia One under PT SMI was the world’s first blended finance national platform

Mr. Edwin Syahruzad

Chief Executive Officer, PT Sarana

Multi Infrastruktur (Persero), THK Forum Partner

As a special mission vehicle under The Ministry of Finance Republic of Indonesia, PT SMI has been successful in managing SDG Indonesia One, a blended finance platform for accelerating sustainable development projects through collaboration between strategic partners, since 2018. Further, at G20 3rd Finance Ministers and Central Bank Governors meeting which held in last July 2022, the Government of Indonesia through the Ministry of Finance assigned PT SMI to act as the Energy Transition Mechanism (ETM) Country Platform Manager. Through this mandate, we are committed hand in hand to collaborate with our strategic partners such as donors, multilateral institutions, philanthropies, sovereign wealth fund and also governments in creating a unique and favourable blended finance scheme for the acceleration of the Country’s ETM agenda in a just and affordable way. We open for any collaboration to support the achievement of Sustainable Development Goals in Indonesia.

Highlight: Implementation of SDG Indonesia

It has implemented green infrastructure projects and co-shaped the path in the Global Blended Finance Alliance

Illustrative:

Climate Actions & SDG Initiatives

Energy transition accelerates the transformation of fossil fuels into renewable energies by using different source of funds (Blended Finance)