OJK had issued a regulation No.60/POJK.04/2017 on Issuance and Requirements of Green Bond (Penerbitan dan Persyaratan Efek Bersifat Utang Berwawasan Lingkungan) whose proceeds has  to be used for environmental-friendly projects which objective is to protect, repair, and/or enhance the quality or environmental functions. Thus, the issuance of green bond shall only use for financing of  environment-friendly projects such as for renewable energy, energy efficiency, pollution prevention and control, natural resources management and sustainable use of land, biodiversity conservation, environmental friendly transportation, sustainable water management, waste management, climate change adaptation, eco-friendly product, green buildings, and other environment-friendly projects. Companies planning to issue green bonds must meet certain requirements including the followings: (i) shall provide a statement confirming to use the proceed to finance environment-friendly activities; (ii) shall provide opinion from competent environmental consultant to confirm that the activities funding from the bond is beneficial for environment; (iii) shall provide evidence of environmental consultant competency; and (iv) the fund from public offering of the green bond  at least 70 %  shall be used for environment-friendly projects. And this regulation also stipulates the procedures if the project financed by this green bond is no longer qualify as environment-friendly projects. OJK may grant Incentives for the companies who issues this green bond, but this regulation does not elaborate further what will be the incentive.   

Following such OJK regulation, Indonesia Government in February 2018 has offered green bond to international market, as such marking Indonesia Government to become the first Asian country to sell a green bond on the international market. The green bond is structured as a sukuk and with 5 year term (a five-year green Sukuk bond) and under US dollar currency. This green bond issuance by the Indonesia Government is to finance Indonesia’s commitment to reduce GHG emission as pledged by Indonesia Government during the Paris Climate Change Conference in 2015, by at least 29% by 2030 from a business-as-usual baseline levels and up to 41 % with international assistance.


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