Government Climate Spending Reaches Rp 73 Trillion Annually
Acting Director General of Financial Sector Stability and Development at the Ministry of Finance, Herman Saheruddin, stated that the government’s average expenditure to address climate issues reached Rp 73.5 trillion per year during the 2018-2024 period.
“Climate-related spending accounts for approximately 3 per cent of the state budget (APBN), with average annual expenditure exceeding Rp 70 trillion,” Herman said.
He noted that the nominal amount reflects the government’s strong commitment to tackling climate problems. However, it also highlights the substantial climate financing gap. According to data from the National Development Planning Agency (Bappenas), Indonesia requires between Rp 794 trillion and Rp 800 trillion per year to achieve its Net Zero Emission target by 2060.
“Therefore, public spending should not be seen as the final solution, but rather as a catalyst that encourages greater participation from the private sector,” Herman remarked.
He explained that the government positions the state budget not as the primary source of climate financing, but as a catalyst to reduce investment risk, strengthen investor confidence, and drive far greater private sector involvement. The Ministry of Finance believes that sustainable development will only succeed if the government and market players build solid cooperation to address climate issues.
This is because a comprehensive, diversified, and collaborative financing ecosystem is needed to realise Indonesia’s climate targets. “For this reason, Indonesia has developed a climate financing architecture that combines resources from the public and private sectors, as well as from domestic and international partners,” Herman said.
He explained that from the public financing side, climate funding is supported through the state budget, regional government spending, fiscal incentives, and innovative financing instruments. These instruments include Green Sukuk, SDG Bonds, Blue Bonds, and the Disaster Pooling Fund.
Furthermore, the government continues to encourage increased support from the banking sector, capital markets, carbon markets, philanthropy, corporate investment, and blended finance. International support is also sought through multilateral development banks, bilateral partners, and international financial institutions.
“Every source of financing must complement each other so that climate action can be implemented at the scale and speed required,” Herman concluded.