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Title: The political and institutional constraints on green finance in Indonesia
Authors: Guild, James
Keywords: Social sciences::Political science
Issue Date: 2020
Source: Guild, J. (2020). The political and institutional constraints on green finance in Indonesia. Journal of Sustainable Finance and Investment, 10(2), 157-170.
Journal: Journal of Sustainable Finance and Investment
Abstract: 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.
ISSN: 2043-0795
DOI: 10.1080/20430795.2019.1706312
Rights: © 2020 Informa UK Limited, trading as Taylor & Francis Group
Fulltext Permission: none
Fulltext Availability: No Fulltext
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