It is the most recent country to structure a bond which contributes to development of environmental-friendly projects, according to Financial Times

Felipe Gordillo, a senior analyst at BNP Paribas Asset Management, said, “It is a very interesting green bond as they are using their existing infrastructure for Islamic finance, and the areas in which they are going to be investing—climate mitigation and climate resilience—are interesting.”

An independent science-based Climate Action Tracker (CAT) assessment report  predicts Indonesia’s emissions to rise by 2030. The report said Indonesia’s Nationally Determined Contribution (NDC) is ‘insufficient’ with low levels of commitment. Referring to the Paris Agreement temperature goal, its emissions should balance out if not decline.  

By 2026, the Indonesian government is focused to increase the use of renewables to more than 20%. However, “Indonesia’s climate policy is a contradiction—an apparent mismatch between a plan to have renewables play a stronger role in its energy mix, while simultaneously locking in a large and growing role for coal, which will lead to continually rising emissions,” the report reads. The country’s current use of renewables is less than three percent.

Last month Poland was listed as the first country to sell two green bonds. The country heavily relies on coal as 80% of its power generation is from this fossil fuel.

Green finance has grown significantly with a record of US$155bn in 2017, observed Moody’s. This year, global green bond issuance is expected to grow 60% to reach US$250bn  record. Moody’s analyst Matthew Kuchtyak said other countries are driven to implement green finance, but it is India and China that will take the lead in this market. 

The post Coal-reliant countries embrace green finance appeared first on International Finance.