Funding plays a key component in achieving the Sustainable Development Goals (SDGs). The United Nations created the SDGs in 2015 as a set of goals aiming to build a more sustainable future through tackling global issues from climate change to inequality. As the target deadline of 2030 nears, financing initiatives have significantly aided Indonesia’s pursuit of the goals through increasing funds. This article will explore updates on SDG 9 in Indonesia, which aims to create sustainable industry, innovation and resilient infrastructure.

Indonesia’s Progress in Industry and Infrastructure  

Indonesia, a highly populated nation becoming a prominent tourism hub, has quickly industrialized since the 1960s. Strides in telecommunications, electricity, ports and railways have increased infrastructure . Industry has boomed, with some fluctuation during financial crises, with Indonesia’s GDP going from $5.67 billion in 1967 to 1.37 trillion in 2023.

Indonesia’s growth has led to major strides in other SDG areas. SDG 1, which aims to eliminate poverty, has particularly benefited. From 1990 to 2023, Indonesians living below the extreme poverty line significantly decreased, going from 62.8% to 1.9% of the population. Yet, to achieve the SDGs by 2030, Indonesia needs significantly more funding. The following finance programs are filling this funding gap, particularly aiding sustainable industry and infrastructure.

SDG Indonesia One

The Indonesian Ministry of Finance and PT Sarana Multi Infrastruktur (PT SMT) established SDO Indonesia One (SIO) in 2018. PT SMT is a state-owned business which aims to fuel sustainable development in Indonesia through financing. Together, PT SMT and the Indonesian government mobilize public and private funds for development.

One initiative that SIO leads is the SDG Indonesia One-Green Finance Facility (SIO-GFF). This investment platform provides funds for environmentally friendly infrastructure projects which fit with the SDGs and the Paris Agreement. The Asian Development Bank (ADB) plays a key role in SIO-GFF, an example of how SIO facilitates partnerships with external organizations to mobilize funds. In 2022, the Asian Development Bank approved a $150 million loan to assist Indonesia in achieving the SDGs.

At its launch in 2018, SIO had already raised $2.3 billion, with initiatives like SIO-GFF playing a key role in advancing the SDGs. Specifically, in regards to SDG 9, SIO has funded sustainable industrialization and resilient infrastructure. SIO has invested in projects such as hospitals, renewable energy power plants and rebuilding infrastructure damaged from natural disasters.

Accelerating SDGs Investments in Indonesia

Another update to SDG 9 in Indonesia is the creation of the Accelerating SDGs Investments in Indonesia (ASSIST) in 2021. ASSIST is an U.N. established financing initiative joining the efforts of four U.N. agencies–UNEP, UNICEF, UNIDO and UNDP–to help Indonesia achieve its SDG targets by 2030. 

Similarly to SIO, ASSIST promotes increased public and private investment into SDG-related initiatives. ASSIST has done this by issuing government bonds, increasing SDG-linked loans and in the creation of the Operationalized Indonesia Impact Fund (IIF) which invests in startups contributing to the SDGs. On top of financing, ASSIST has strengthened the skills of government officials and entrepreneurs to increase the capacity of Indonesian institutions and businesses to achieve the SDGs on their own.

As of June 2024, ASSIST has raised more than $3.2 billion for SDG achievement, benefitting more than 48 million people. These funds are contributing to Indonesia’s achievement of SDG 9. Particularly, capacity building and investing in startups construct resilient infrastructure and foster innovation. 

Looking Ahead

While Indonesia has made significant strides in industry and infrastructure in the past 40 years, the country still needs funding to achieve SDG 9. Financing initiatives have mobilized funds to fill this gap. Updates on SDG 9 in Indonesia, such as ASSIST and SIO, are constructing sustainable industry and resilient infrastructure, and fostering innovation, making Indonesia one step closer to achieving their SDG targets. 

– Madison Fetch

Madison is based in Glasgow, Scotland and focuses on Business and Politics for The Borgen Project.

Photo: Unsplash