The Indonesian government has introduced a range of fiscal incentives to attract private investments, notably in the realm of green projects. Notably, the country has secured a substantial commitment of USD 20.3 billion in investments for the electric vehicle supply chain. These incentives, including tax holidays, allowances, value-added tax facilities, import duties, and property taxes, have been aimed at encouraging investors to participate in green projects and industries, fostering an evolving landscape of green investment in Indonesia. Febrio Nathan Kacaribu, the Head of Fiscal Policy Agency, highlighted the successful cultivation of an investment-friendly environment for green transition in the nation. He emphasized that the Indonesian government's fiscal incentives and policies for green industries have been instrumental in attracting private investment. The hope is that these measures, along with green industry downstreaming policies, will help curb carbon emissions by around 50 million tons, elevating Indonesian position in green transition.
Previously, the government sought a USD 200 billion investment, approximately IDR 3.065 trillion, over the next decade to develop green properties, in alignment with the Green Building concept outlined in Indonesian law. Finance Minister Sri Mulyani stressed the necessity of encouraging developers to adopt green building initiatives, given the relatively low awareness of such practices among the population. She noted that substantial investment, around USD 200 billion, will be required to meet the growing demand for sustainable buildings in Indonesia alone, as highlighted at the ASEAN Finance Ministers and Central Bank Governors Meeting. Mulyani emphasized that innovative and environmentally friendly building financing is crucial for transforming the economy, particularly within the construction sector, which must transition towards more eco-conscious practices. The call is to address hurdles related to the implementation of green building practices in Indonesia, tapping into the potential of sustainable structures and fostering an environmentally conscious economic transformation.
