Making infrastructure in Indonesia more modern and climate-friendly

Project description

Title: Green Infrastructure Development in Indonesia
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Indonesia
Overall term: 2020 to 2023

Context

Indonesia's socio-economic development over the past two decades has been impressive, but has unfortunately resulted in a number of negative environmental impacts. The continuing lack of urban infrastructure means there is widespread congestion as well as excessive pressure on electricity and water supplies. These have significant undesired effects on the environment and also increase emissions from inadequate wastewater treatment and waste disposal. There is a profound need for further policy reforms and increased investment in urban infrastructure to improve the provision of public services, reduce pollution and reduce CO2 emissions. These challenges are to be tackled in a medium-term development plan for the years 2020-2024.

To tackle this, the Bilateral Government Negotiations that took place in Berlin on 1 October 2019 agreed to launch an Indonesian-German Climate Initiative. As a result, the Coordinating Ministry for Maritime Affairs and Investment (CMMAI) and the subordinate Committee for the Acceleration of Priority Infrastructure Delivery (KPPIP) were mandated to coordinate and accelerate the planning and implementation of priority infrastructure projects.

The Indonesian-German Initiative for Green Infrastructure was agreed as part of these efforts. Its aim is to set up a five-year financial cooperation (FC) facility providing low-interest loans and promotional loans of up to 2.5 billion Euros to support infrastructure projects. Funding in the form of loans will be provided via the German Development Bank (KfW) for investments. The money will be used to promote climate-friendly infrastructure in Indonesia in three relevant sectors: solid waste management, wastewater management, and urban public transport.

Objective

Indonesia is planning and preparing environmentally relevant infrastructure projects to improve the urban transport system as well as the provision of public utilities. 

Approach

The project aims to improve the capacities of relevant actors at national and sub-national level in Indonesia. Its main aim is to prioritise infrastructure projects as part of the Indonesian-German Green Infrastructure Initiative based on specific criteria agreed with the KfW (at national level). National-level actors will also receive training to prepare them to execute financing activities at subnational level.

The project’s capacity development strategy involves organisations whose internal processes for identifying, planning, and preparing infrastructure projects have potential to be improved and coordinated more effectively. These include CMMAI and KPPIP as well as the Regional Development (BAPPEDA) and the Provincial Directorates for Settlements (SATKER) in four selected provinces: West Java, Central Java, East Java and Bali. At individual level, technical skills will be taught so that local actors can select and, where necessary, adapt green infrastructure projects. They will also learn how to conduct preliminary feasibility studies that also include gender and poverty reduction aspects.

The sectoral approaches can be summarised as follows:

Solid waste management:

  • Collecting waste and recovering recyclables
  • Installing flood protection
  • Rehabilitation of landfills or establishment of controlled landfills 
  • Mechanical-biological waste treatment with production of substitute fuels from high-calorific fractions
  • Setting up waste-sorting plants
  • Waste incineration plants for large cities/ densely populated areas
  • Collecting landfill gas for energy generation.

Urban water management:

  • Improving the public water supply
  • Creating rainwater drainage systems and integrated sewage systems
  • Installing coastal flood protection
  • Generating energy from biogas in wastewater treatment plants
  • Increasing energy efficiency in wastewater treatment plants
  • Treating faecal sludge from decentralised sanitary systems.

Urban public transport:

  • Providing reliable and greener public transport
  • Promoting urban rail-based transport and fast bus systems
  • Use of renewable energy for public transport
     

Last update: February 2021

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