AFD has been working in Indonesia for over fifteen years to promote green and inclusive growth. Our funding in the country primarily takes the form of loans to the government, businesses and public banks and grants to support project preparation and implementation. Our goal is to support the country’s green and resilient development to reduce greenhouse gas emissions while ensuring economic and social progress in the country.
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Fisherman in Palu, Indonesia
AFD and Indonesia: supporting a low-carbon, fair and resilient transition
Fisherman in Palu, Indonesia

Promoting renewable energies and energy efficiency

Renewable energy in Indonesia

Promoting renewable energies and energy efficiency

With nearly 1.5 gigatons of CO 2 equivalent emitted annually, Indonesia is one of the world’s largest emitters of greenhouse gases. This is mainly due to deforestation, land-use change, and the significant use of fossil fuels for energy production and transport.

AFD is supporting Indonesia in its commitment to energy transition and achieving carbon neutrality in the electricity sector by 2050. Our funds have contributed to State reform in the sector, investments by the national electric operator (PLN) through network renovation projects and loans to private and public operators to fund small renewable energy projects through credit lines to the financial institution PT-SMI.

Our future funding will be part of the just Energy Transition Partnership, an alliance between Indonesia and its partner countries to accelerate its energy transition. 

Proparco, AFD Group’s private sector subsidiary, will support independent energy producers, primarily through loans. 

Conserving natural resources

The spatial oceanographic center to fight against illegal fishing and protect coral, Indonesia

Conserving natural resources

Indonesia is the world's second largest producer of fishery products. It is also the second largest producer of plastic waste that ends up in the ocean. The country is a hotspot for biodiversity. It is home to the third largest rainforest in the world, yet it is also one of the largest contributors to deforestation (although the rate of deforestation has dropped significantly in recent years). 

AFD is focusing its efforts on conserving natural coastal and marine environments, an area in which it has recognized experience in the country. AFD’s objectives include capacity-building for Indonesian institutions to increase their knowledge of the environment (fishing resources, oceanography, marine meteorology, blue carbon) and promoting the sustainable development of a blue economy (modernization of fishing ports based on an eco-certification approach, traceability of seafood products). Together with KfW and the Asian Development Bank, AFD also intends to support the implementation of the national action plan to reduce plastic debris in the ocean. 

Improving urban infrastructure and services

Urban infrastructure and services in Indonesia

Improving urban infrastructure and services

Indonesia wants to develop infrastructure and public services, which are absolutely essential in responding to the increase in urbanization and tackling territorial inequalities. 

AFD supports the country by contributing to funding for sustainable infrastructure and capacity-building initiatives for the institutions that are in charge of its management. Given the needs for urban mobility and the sector’s contribution to greenhouse gas emissions, AFD is prioritizing the implementation of integrated and inclusive urban transport projects and strengthening the resilience of territories to natural disasters.

Credit lines for public banks could be used to promote the development of other urban services, such as water and sanitation.

Supporting green financial transition

AFD Financial Communication

Supporting green financial transition

The financial system plays an important role in funding the energy transition and low-carbon infrastructure. AFD supports financial transition that promotes the allocation of capital in keeping with the Paris Agreement and contributes to managing climate-related risks to the financial system.

AFD therefore intends to strengthen its collaboration with public banks by setting up credit lines and providing technical support to improve their internal practices and procedures or to integrate climate risk into their operations. It is also studying the possibility of supporting the Indonesia financial services Authority (OJK) to promote sustainable finance principles. This would include integrating environmental and social risks and conducting climate stress tests. 

billion euros invested since 2007
+ 60
projects funded in fifteen years

With 108,000 km of tropical coastlines and over 17,500 islands, Indonesia is the largest archipelago in the world, making it a hotspot for marine and terrestrial biodiversity. Its geographical location also makes it one of the most disaster-prone countries in the world (earthquakes, tsunamis, volcanic eruptions) and among the most vulnerable to the effects of climate change (rising temperatures and sea levels, floods).

Indonesia has the top economy in Southeast Asia and sixteenth largest in the world and is a member of the G20. The country has experienced consistent economic growth since the Asian crisis of 1997 and the democratization of the regime in 1998. This growth, combined with a tripling of the population in sixty years, has created opportunities as well as major challenges, including increasing demand for energy and transport, rapid urbanization, overexploitation of natural resources, and environmental pollution.

In light of these challenges and in keeping with Indonesia’s sustainable development priorities, AFD is helping the country pursue low-carbon development as part of its fair and resilient transition.

AFD’s office in Jakarta opened in 2007. It is attached to the Southeast Asia Regional Office based in Bangkok.

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News & Events

Eurasia and Beyond | Indonesia

Indonesia: Fishermen Back On Their Feet after the Tsunami

The tsunami that hit hard in part of Indonesia in September 2018 destroyed their boats. Today, many fishermen in Palu, on the island of Sulawesi, only survive through humanitarian aid. But thanks to the project to revive the local economy and protect against natural disasters, funded by Agence française de développement (AFD), some are already returning to sea. Here is a report from Palu, in the centre of the island.


Filmed evaluation

Diverting Solid Waste

Oct 2020
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