Indonesia Encourages Increased Accessibility of Financial Instruments

Published on: 18 June 2022
by KnowESG
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Indonesia is pushing to increase the accessibility and affordability of sustainable financial instruments at the third Sustainable Finance Working Group (3rd SFWG) under Indonesia's G20 Presidency in Bali.

The meeting was officially opened by the Director of International Customs and Excise Cooperation, Directorate General of Customs and Excise, Ministry of Finance Anita Iskandar representing the G20 Presidency of Indonesia.

"To encourage and support the green transition mechanism, the Indonesian Presidency has prioritised the energy transition mechanism towards cleaner and affordable energy," Iskandar noted in a statement received in Jakarta, Thursday.

Iskandar remarked that these priorities included intensive policy discussions to improve accessibility and affordability in the formulation of the policy of Energy Transition Mechanism (ETM).

In encouraging increased accessibility and affordability of sustainable financial instruments, members highlighted the importance of increasing the use of digital technology to reduce the burden of operational costs in sustainable finance practices, especially for the Small and Medium Enterprises (SME) sector, as well as encouraging the government to help companies adapt to Sustainable Supply Chain Finance (SSCF).

Moreover, several members highlighted the importance of increasing support and role for SMEs as well as encouraging the role of Multilateral Financial Institutions/Multilateral Development Banks (MDBs) and International Organisations in providing financial support and assistance for capacity building for developing country groups.

Meanwhile, accessibility can also be increased by using the support of the banking system, which involves the role of local and national banks as partners in the implementation of blended finance.

As a continuation of the earlier series of SFWG meetings, the members met again at this meeting to intensively discuss the latest developments and case studies, including parallel discussions on models of financing and investment policy to support the transition.

The discussion encourages the commitment of financial institutions by developing a framework that supports the financial transition and increases the credibility of financial institution commitments, expands sustainable financial instruments with a focus on increasing accessibility and affordability of costs, and monitors the latest developments of the G20 Sustainable Finance Roadmap.

The third SFWG was chaired by the SFWG Co-Chairs—the United States and China—and moderated by the United Nations Development Programme (UNDP) as the SFWG Secretariat.

Before the core meeting of SFWG, the Indonesian G20 Presidency held a Forum on International Policy Levers for Sustainable Investment. The results of the series of forums and meetings will serve as inputs for the third meeting of the Deputy for Finance and the Central Bank as well as the third meeting of the G20 Ministers of Finance and Central Bank Governors.

At the Policy Levers Forum, members discussed and highlighted various alternative instruments and approaches to achieve an orderly, fair, and affordable transition process.

Members also support the development of a transitional finance framework that is not only flexible and dynamic but also practical, credible, and science-based.

Indonesia's G20 presidency is committed to promoting collective action and developing practice models to deliver tangible results in achieving the 2030 Agenda for the Sustainable Development Goals and the Paris Agreement.

Source: Antara News

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