Since 2020, under the leadership of the National Development Planning Agency (BAPPENAS), Indonesia has made significant progress in enhancing coherence between planning and financing strategy for SDGs through its INFF. Numerous components of the INFF building blocks are being operationalized, including financing strategies to support Indonesia's medium-term development plan (RPJMN) and SDG roadmap; monitoring frameworks to track progress toward the nation's sustainable development vision; and systems to support the investment towards SDG-aligned projects.
Indonesia has pioneered innovative financing instruments, such as issuing the world's first sovereign Green Sukuk, and leveraging Islamic finance, blended finance, and social impact investments.
The forthcoming SDG Financing Hub will serve as a crucial vehicle for executing the INFF. The hub will facilitate coordination, foster coherence, and connect various financing policy areas, ministries, and actors to create a more holistic approach to financing sustainable development and devising innovative financing schemes to mobilize private investments. This will be coordinated under the guidance of key Ministries, such as Ministry of National Development Planning/Bappenas, Ministry of Finance, Central Bank, and Financial Service Authority.
A primary outcome of Indonesia's INFF is the planned integrated and gender-responsive financing strategy, which will unite policy, governance approaches, and financing instruments across public and private finance. The strategy will outline a more comprehensive and coherent approach to utilizing public policy tools across these financing areas to support national sustainable development objectives.
The financing strategy will identify and test opportunities for new models that unlock increased financing and impact. These include improving blended finance mechanisms to attract private finance, Improve impact investment mobilization, align philanthropy and faith-based financing with SDG and promote collaboration between stakeholders to create greater impact and establish a blue finance ecosystem for strengthened resource mobilization. In response to COVID-19, the strategy will ensure that SDG financing priorities are articulated with a deeper understanding of the pandemic's socio-economic impacts and integrate risk management approaches to better mitigate future risks of pandemics and other external shocks.
