Minister urges implementation of ESG for IKN project investments

The president (Joko Widodo) often says that it is not only about transferring (the capital) but also about developing a new way of life, especially regarding the green aspect.

Badung, Bali (ANTARA) – Indonesian Finance Minister Sri Mulyani Indrawati has encouraged the implementation of an Environmental, Social and Governance (ESG) framework to attract investment for the development of the future Indonesian capital (IKN) Nusantara.

“If we want to attract (investment) funds from the private sector or international (institutions), the strategic attempt is to meet quality (development) standards, including the (implementation) of ESG” , she remarked on Saturday.

The Minister made the statement at the 2022 Joint G20 Finance and Health Ministers Meeting (JFHMM) and the launch of the ESG Framework and Handbook.

The JFHMM is organized as part of the Sherpa Track to strengthen global collaboration on pandemic prevention, preparedness and response.

The minister pointed out that the government strongly encourages the participation of the private sector in the development of the future capital since the state budget (APBN) would finance only about 20% of the development project.

Nevertheless, the government will review the quality standard of investments, including the application of the ESG framework, in choosing which investors could contribute to the financing and construction of the IKN, she noted.

Apart from the investors, she assured that ministries or public bodies involved in the construction of the IKN, such as the Ministry of Public Works and Social Housing (PUPR), would also apply the framework.

Indrawati remarked that the framework is being implemented because the construction of IKN Nusantara is not only aimed at moving the center of government from Jakarta, but also at encouraging a new way of life that prioritizes sustainability.

“The president (Joko Widodo) often says that it is not just about transferring (the capital) but also about developing a new way of life, especially with regard to the green aspect,” she said. points out.

ESG principles should be applied to infrastructure development in Indonesia as they prioritize environmentally friendly aspects, benefit society and implement very good governance, the minister noted.

“Certainly, I am very happy that these principles will continue to be developed and improved,” she remarked.

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