The political and institutional constraints on green finance in Indonesia
The ADB estimates Asia’s infrastructure needs from 2016 to 2030 will exceed US $26 trillion. This ballooning demand for infrastructure, coupled with rising investor awareness of the importance of sustainable development, is driving the nascent green finance sector. In emerging markets, raising capit...
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| Format: | Journal Article |
| Language: | English |
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2022
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| Online Access: | https://hdl.handle.net/10356/154925 |
| _version_ | 1811696014406451200 |
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| author | Guild, James |
| author2 | S. Rajaratnam School of International Studies |
| author_facet | S. Rajaratnam School of International Studies Guild, James |
| author_sort | Guild, James |
| collection | NTU |
| description | The ADB estimates Asia’s infrastructure needs from 2016 to 2030 will exceed US $26 trillion. This ballooning demand for infrastructure, coupled with rising investor awareness of the importance of sustainable development, is driving the nascent green finance sector. In emerging markets, raising capital for green projects is often the easy part; identifying and implementing suitable projects and structuring the financing is more challenging. This paper draws on the school of institutional economics to analyse the potential of green finance in underwriting renewable energy development in Indonesia. The paper argues that even if there is strong demand on capital markets for green bonds backing clean energy projects, the institutional design of the renewable energy sector has created a misaligned incentive structure for Indonesia’s political class. The paper concludes by discussing Ministerial Regulation 50/2017 which has created a regulatory framework that side-steps some of these constraints. |
| first_indexed | 2024-10-01T07:32:38Z |
| format | Journal Article |
| id | ntu-10356/154925 |
| institution | Nanyang Technological University |
| language | English |
| last_indexed | 2024-10-01T07:32:38Z |
| publishDate | 2022 |
| record_format | dspace |
| spelling | ntu-10356/1549252022-01-14T08:20:59Z The political and institutional constraints on green finance in Indonesia Guild, James S. Rajaratnam School of International Studies Social sciences::Political science Indonesia Green Finance The ADB estimates Asia’s infrastructure needs from 2016 to 2030 will exceed US $26 trillion. This ballooning demand for infrastructure, coupled with rising investor awareness of the importance of sustainable development, is driving the nascent green finance sector. In emerging markets, raising capital for green projects is often the easy part; identifying and implementing suitable projects and structuring the financing is more challenging. This paper draws on the school of institutional economics to analyse the potential of green finance in underwriting renewable energy development in Indonesia. The paper argues that even if there is strong demand on capital markets for green bonds backing clean energy projects, the institutional design of the renewable energy sector has created a misaligned incentive structure for Indonesia’s political class. The paper concludes by discussing Ministerial Regulation 50/2017 which has created a regulatory framework that side-steps some of these constraints. 2022-01-14T08:20:58Z 2022-01-14T08:20:58Z 2020 Journal Article Guild, J. (2020). The political and institutional constraints on green finance in Indonesia. Journal of Sustainable Finance and Investment, 10(2), 157-170. https://dx.doi.org/10.1080/20430795.2019.1706312 2043-0795 https://hdl.handle.net/10356/154925 10.1080/20430795.2019.1706312 2-s2.0-85078637456 2 10 157 170 en Journal of Sustainable Finance and Investment © 2020 Informa UK Limited, trading as Taylor & Francis Group |
| spellingShingle | Social sciences::Political science Indonesia Green Finance Guild, James The political and institutional constraints on green finance in Indonesia |
| title | The political and institutional constraints on green finance in Indonesia |
| title_full | The political and institutional constraints on green finance in Indonesia |
| title_fullStr | The political and institutional constraints on green finance in Indonesia |
| title_full_unstemmed | The political and institutional constraints on green finance in Indonesia |
| title_short | The political and institutional constraints on green finance in Indonesia |
| title_sort | political and institutional constraints on green finance in indonesia |
| topic | Social sciences::Political science Indonesia Green Finance |
| url | https://hdl.handle.net/10356/154925 |
| work_keys_str_mv | AT guildjames thepoliticalandinstitutionalconstraintsongreenfinanceinindonesia AT guildjames politicalandinstitutionalconstraintsongreenfinanceinindonesia |