Innovation and Learning

Green sukuk - financing the fight against carbon emissions

The momentum for climate action is a unique opportunity to unlock massive financial flows and generate economic and social benefits while protecting people and planet. As governments and development partners cannot alone achieve the SDGs - or provide the resources needed to meet the 2030 goalpost - the creativity and knowhow from all of society is needed. In Indonesia, innovative approaches are underway to boost social finance and private sector investments for a more inclusive and sustainable growth model.

UNDP'S Response 

UNDP supported Indonesia to establish a platform for innovative green financing – connecting investors, entrepreneurs, government, Islamic finance institutions, philanthropists and youth – which helped the country become the first to issue a US dollar denominated sovereign green Islamic bond (sukuk) that leverages private finance for climate change mitigation, adaptation and biodiversity preservation. Following issuances in 2018 and 2019, with total proceeds amounting to 2 billion USD, the government is planning to continue the green sukuk issuances over the coming years and is currently selecting projects for 2020. UNDP also supported the issuance of the world’s first green sukuk for the domestic retail market in November 2019, introduced through an online platform with a low minimum amount (equivalent of 74 USD) to encourage investments among young people. The government is now exploring other thematic bonds, including blue and SDG bonds, to continue harness innovative financing for sustainable development.

Focal Points

  • Muhammad Didi Hardiana
    Project Manager for Sustainable Development Financing
    UNDP Indonesia
  • Joan Manda
    Climate Change Finance Specialist
    UNDP Indonesia
  • Tiara Utami
    Technical Assistant for Green Finance
    UNDP Indonesia