THK Dialogue Climate Road to G20

In launching the New Era Bali Kerthi Roadmap, President Joko Widodo said the pandemic has opened door to a new development path. The New Era Bali Kerthi Economic Roadmap reflects the Balinese Tri Hita Karana philosophy of balance between people, nature and spiritual peace. The series of Tri Hita Karana Dialogues Road to the G20 and the 2022 Tri Hita Karana Forum on Blended Finance held around the G20 Bali Leaders’ Summit encapsulated this spirit and spelt out critical next steps. It declared that now is the time for action; an opportunity offering massive payoff to communities and business. Blended finance is one of the pathways to generate the needed investment. At the G20 Summit, Indonesia launched the Global Blended Finance Alliance (GBFA) and successfully produced the joint G20 Bali Leaders’ Declaration supporting the GBFA in bridging the SDG Funding Gap through diverse stakeholders and alignment through G20 Blended Finance Principles.

H.E. Retno Marsudi Minister for Foreign Affairs of the Republic of Indonesia G20 Foreign Affairs Ministers

Meetings Nusa Dua Bali, 6 July 2022

As for the energy…we need to accelerate progress in energy transitions. Our collaboration must focus on affordable transfer of technology and investments in particular for developing countries. Government funding alone is not sufficient for energy transitions… We need to look into blended finance as an innovative solution. We invite G20 countries and beyond to support the Global Blended Finance Alliance to be launched at the G20 Leaders’ Summit in November.

H.E. Suharso

Minister of National Development Planning, Republic of Indonesia at Launch of New Era Bali Kerthi Economic Roadmap, 3 December 2021 Through Bali’s economic transformation, the Kerthi Bali economic roadmap towards New Era Bali, work force productivity is expected to increase 4 fold and local economy grows at 7.4% on average. Gross Regional Domestic Products per capita increases 8 fold. Poverty level shall be reduced to 0.18%. And unemployment drops to 0.5%.

The plan ushers in an era of sustainability, through the increase of green products and green jobs.It is our greatest hope that this roadmap prototype success can be replicated in other provinces to redesign long-term post-pandemic development plans as we collectively work towards Golden Indonesia 2045 vision.

We thank all who have shown real support in the preparation of this Kerthi Bali economic roadmap towards the New Era Bali and Master Plan 8.

I wish also to acknowledge Kura Kura Bali is committed to support the Government in the effort to revive this Paradise Island from its pandemic situation and enter the New Era Bali.

I earnestly hope that all stakeholders align with the Government’s plan to serve as areas of development, innovation of the green sector, health, sports, creative, and digital technology. Kura Kura Bali, particularly, has the potential for technological transformation and sustainable development in line with the Kerthi Bali economic roadmap towards New Era Bali — Bali that’s green, resilient, and prosperous. Peace. May God bless us all.

Dr.

Minister of International Cooperation, Egypt at THK Forum Road to G20 Dialogue, 13 July 2022

I truly commend Indonesia for its leadership on the G20 agenda, especially putting sustainable finance at the heart of recovery, security and sustainable growth. The G20 priorities go to the heart of people and planet. This is an agenda that requires bold and transparent leadership, most importantly, fit for purpose capital. These are also priorities for COP 27, as we are hosting it in Sharm El-Sheikh in November. We are committed to working together to accelerate climate action, especially delivering just energy transition, as well as unlocking adaptation finance. This COP is truly about adaptation and resilience and trying to move from pledges to implementation. Indonesia has an example of both. You’ve launched the world’s first sustainable land use bond to tackle deforestation. You’ve also prioritized the restoration of carbon-rich peatland, mangroves and coral reefs. And you have deployed nearly a billion dollars to the SDG one platform for sustainable infrastructure, including clean energy and circular waste management projects. We know that these initiatives in addition to trying to address the climate challenge also create jobs, strengthen GDP, reduce energy bills, and build physical and financial resilience for communities and companies. These experiences need to be built on in different forums and platforms. This also encourages South-South cooperation. There is simply no time to reinvent wheels, but to scale projects that have worked. This is why launching the Blended Finance Alliance is extremely important at this moment. It will help accelerate knowledge sharing, prove new sustainable business models, unlock investments and reduce transaction costs to access catalytic capital for similar projects.

H.E. Airlangga Hartarto Coordinating Minister of Economic Affairs, Republic of Indonesia, THK

Forum Co-host, at THK Forum

Climate Road to G20 Dialogue

We plan to launch centres of excellence in technology and finance during our 2022 G20 tenure. We are looking to the private sector for tech innovation because through private sector entrepreneurship we can secure the massive change needed to meet the global goals. A Tri Hita Karana Centre for Future Knowledge is a platform for technological innovation and transfer with global collaboration. The Centre of Future

Knowledge’s green and clean renewable energy hub will support value creation for ‘Better Business Better World.’ The Centre will focus on the role of technology transfer, R&D by private investment with leading global academia and research in realizing a sustainable future in Indonesia. We have launched the THK Roadmap on Blended Finance that has been developed by the global community with the guidance from the OECD DAC and we will initiate a Global Blended Finance Alliance in Bali to align Blended Finance principles with the acknowledgement of G20 countries in the Development Working Group.

The Honorable John Kerry

U.S. Special Presidential Envoy for Climate, Co-Host THK Forum

Climate Road to G20

50% of the species on this planet are gone ... lost, record sea levels and instances of catastrophe on a monthly basis that put life at risk in every nation on the planet. It doesn’t have to stay that way. Doesn’t have to be that way. So we have a task which is to mobilize our communities, our business, our civil society, our government, and bring people together to address this challenge. And my message to you is this. This is not something to fear. It’s something to be concerned about but also motivated by.

… it is an extraordinary moment of economic opportunity for everybody in the world. Why? Because we’re going to do what we fundamentally did in the Industrial Revolution. This is the largest market opportunity, bigger than the Industrial Revolution.

H.

E. Luhut Binsar

Pandjaitan Coordinating Minister of Maritime Affairs and Investment, Republic of Indonesia, THK Forum Co-host, at THK Blended Finance Forum at G20 We have been talking about the importance of blended finance for a long time. Today is about the action. Indonesia’s commitment to climate change is there and very strong. Indonesia has committed to achieve net zero emission by 2060 or sooner. However, we are facing a financial gap to accelerate the achievement of SDGs. Thus, blended finance is so important to finance so many climate projects.

I’m proud of the action we have taken to finance and the transition to a cheap clean energy system. This requires international money to move faster. The Government of Indonesia is currently finalizing the Just Energy Transition Partnership (JETP), including collaboration for early retirement of coal power plants and move towards renewable energy. I’m also proud to see so many blended finance solutions for nature Indonesia. They include the word first sustainable landscape bond and new funds for biodiversity. We have also developed carbon finance regulation, because we have amazing rain forests, peatlands, mangroves, and coral reefs. They need protection and we need to find ways to pay for that.

A more sustainable world is the best way to drive growth and build resilience to economic shocks. Indonesia is proving that we are one of the few emerging markets which has seen an increase in growth up to 5.72% year on year in the third quarter. And we are able also to reduce our inflation to 5.7%.

We don’t have time to lose. We are going to unlock trillions in investment each year for the planet. We need to do that or the next generation will be left with nothing. This is why we are launching the Global

H.E. Siti Nurbaya Bakar Minister of Environment and Forestry

The Republic of Indonesia at THK

Blended Finance Forum at G20 Bali Indonesia continues its efforts in leading by example. Two months ago, we have submitted enhanced nationally determined contribution enhance NDC, which contains increased target of Indonesia’s emission reduction from 29% to 31.89%, with the country’s own capacity, and from 41% to 43.2%, with international support and overseas cooperation, that is in line with Indonesia’s vision to achieve net zero emission by 2060, or sooner. Conservation

Luky Alfirman Director General of Budget Financing and Risk Management, Ministry of Finance, Republic of Indonesia, Co Chair THK Forum at Climate Road to G20 Dialogue

In addressing this climate change, that we all understand that it might be costly. So here, we need to be creative, we need to be innovative, how to find this key element, which is financing. Government cannot bear all the costs for sure. We have good experience when we started our blended finance journey and restoration of Indonesia’s natural assets are also increasing, including the potential expansion of mangrove area to more than 600,000 hectares, capable for carbon absorption. Such increase is coherent with significant progress of our policies, including achieving FOLU Net Sink 2030 and green economy development. Green economic development is also providing opportunities for investment and job creation. To support the national economic recovery. We cannot just think of natural capital as a cost. The World Economic Forum estimates that nature repressing 10 trillion US dollars of economic opportunity by 2030 with a potential to create 395 million jobs around the world.

with the establishment of SDG Indonesia

One back in 2018. So it’s a breakthrough and we thank also the THK that is very instrumental in helping us in promoting, in selling, in convincing investors for SDG Indonesia One. So for this energy transition mechanism, we come up with an initiative called country platform. With global blended finance alliance, I think we can collaborate. This is what investors, what Philanthropies and Green Funds are waiting for, Ministers Pak Luhut and Sri Mulyani share similarly they look for something concrete.

Mari Elka Pangestu

Director, Development Policy and Partnerships,

Managing

The World Bank Group , Co-founder THK Forum at THK Blended Finance Forum at G20 Bali Without urgent action, climate change could push up to 132 million more people into poverty, drive 260 million people to migrate within their own countries.… But I believe that we have come to a point where enough blah, blah, blah, let’s close this circular discussion, and get to the business of how can we do more, and come together around these transformations, and bring all the sources of finance and enabling technology to have the impact on climate and development. …Let me just give you some numbers that have recently come out, including at the COP27. IPCC estimated that you need $1.7 to $3.4 trillion till 2030. And the most recent climate financing report that came out at the COP27 - emerging market economies other than China need to spend $1 trillion in 2025, or 4.2% of GDP, and around $2.2 trillion in 2030… It has to come from first, domestic resource mobilization from the countries themselves, strengthen domestic public finance and domestic capital markets. But there will be $1 trillion of external finance that will be required to meet the scale of transformative investment needs. And this is half, this has to come from a combination of concessional resources, which can mobilize private capital and this is the key role of blended finance.

Simon Hartford

CEO, Global Energy Alliance People Planet (GEAPP), at THK Forum Road to G20 Dialogue

We’re backed initially by Rockefeller Foundation and Bezos Earth Fund, but we work with all philanthropies to make the biggest difference we possibly can as philanthropy to a successful energy transition. We have also worked very closely in advance with all others with the same agenda, our friends at the ADB, the World Bank, and so many others in this conversation today. What do we stand for? We stand for action. We stand for experimentation. We stand for innovation, flexibility, and a relentless focus on outcomes, but also the just on this, which is what we’ve been talking about, has got to be front and center for young people, for the environment and for all aspects. Number one is that cooperation is going to also require coordination.

Climate Road to G20 Dialogue

If you look at climate related investments in emerging markets and developing economies, excluding China, on energy, adaptation, resilience, and food and land use the central climate issues, you see that by 2030, that flow of investment in these emerging markets or economies outside China will have to be around $2 trillion dollars extra per year, that’s perfectly feasible.

Minister Budi G. Sadikin

H.E. Budi Sadikin, Minister of Health, Republic of Indonesia at THK Forum Road to G20 Dialogue “Global Health Architecture: Bali for the World on Health, Resilience, and Happiness” on 27 August, 2022

As global health leaders, today we are the determining actors in the course of human history. We can either let fate lead us through time, or we can shape the destiny of our future global health architecture. The COVID-19 pandemic has shown the tremendous power of unity in facing all kinds of challenges. We have strived in bending iron rules of geography to reach people across the globe. We are finding ways over, under, and through barriers to leave no one behind. And I believe that with such energy, we will survive any future health crisis.

Now more than ever, we need to recover; not individually, but together. Recover together, for a stronger & healthier global community.

H.E Arifin Tasrif

Minister for Energy and Mineral Resources, The Republic of Indonesia at THK Blended Finance Forum at G20 Bali Indonesia is blessed with a number of renewable energy sources - the potential of renewable energy for more than 400 gigawatt is spread almost all over the areas of Indonesia. But it is only utilized for only 10 Gigawatt or around approximately 2.5% ... I’m excited to hear from the panel today at the THK forum, especially PT SMI on the energy transition

Merit Janow

Chair of Board of Directors, MasterCard / Dean Emerita, Professor of Practice, International Economic Law & International Affairs, SIPA, Columbia University at THK Blended Finance Forum at G20 Bali mechanism, which will help finance the shift from coal to renewables, and from PLN and Amazon on their joint announcement. Of course, we await the JETP, these are outcomes which Indonesia has been championing with the strong role of US and Japan. These kinds of commitments are critical to rapidly transition to clean energy system to support the prosperity of the people, tackle air pollution, create jobs and fulfil our energy needs. We also welcome institutes like Rocky Mountain Institute to have a Southeast Asia base in Bali. It is a key driver to post Covid recovery as green investment and jobs underpin sustainable growth. We also congratulate on the E-liability with Harvard and Oxford faculty that will be launch at the THK Center of Future Knowledge in Bali that will drive accurate carbon measures for corporates. Distinguished participants, ladies and gentleman, developing renewable energy at scale in Indonesia is key to tomorrow sustainable future.

The THK Forum has done a remarkable job advancing the SDGs broadly and more recently, working extremely creatively with business policymakers and NGOs to advance the concept and also the reality of blended finance in support of projects and ideas to reduce climate effects.

Darmawan Prasodjo

President Director, PT. Perusahaan

Listrik Negara (PLN) at THK Forum Road to G20 Dialogue

This climate crisis is global. The emission of CO2 in Bali here is the same effect as amount of CO2 emission in European countries or in Japan, in United States exactly the same. So it has to be a global effort. So this early retirement of coal fired power plants is using Blended Finance through the energy transition mechanisms. What do we need? Super low-cost finance and green finance. What else do we need? Policy Framework? What more? Our willingness to collaborate. We have all of those ingredients. We’ve been working with the Asian Development Bank, we’ve been working with the US and the world. And we’ve been working hard with so many foundations.

Dr German Velasquez

Director, Global Climate Fund

Mitigation and Adaptation Division, Green Climate Fund at THK Blended Finance Forum at G20 Bali

We talk to a lot of small island countries. And we discussed that 30 by 30 concept, which is the concept of conserving 30% of our ecosystem by 2030. And they all tell us, it’s a difficult challenge to achieve because protection alone is simply not sufficient for them. They said that they have other needs more important than just protection, like food security. Taking the words of Dr Enki Tan, you can actually do marine protection and food security at the same time. This project actually shows you how to do that. So I believe that the concept of Blue Halo S if it succeeds, will not only be useful for Indonesia, it will serve as a model to many countries, in particular, the small island developing states.

Ng Boon Heong

CEO, Temasek Foundation, THK Forum Partner

Temasek Foundation Singapore crowdsources ideas for disruptive technologies in the area of sustainability and livability solutions. The Foundation grants 1 million SGD to researchers, innovators, and investors. This year’s winner will operate in Jambi, where they will work in social forestry by aggregating smallholders together so that they could sell high-quality timber. A few years ago, the Foundation started the piloting of impact investing, setting aside about 300 million SGD index funds to deliver both impact and market returns. To further impact investing, Temasek Foundation launched the center of impact investing and practices that could be a good complement to the Global Blended Finance Alliance.

Ahmed Saeed

Vice President for East Asia, Asian Development Bank (ADB), at THK Forum Road to G20 Dialogue

It’s lovely to be in this beautiful venue, talking about such important things… When we talk about blending public and private capital. When we talk about mixing these things, we have to make sure we’re not mixing oil and water. And so we need to blend other things. For example. The private sector is nimble and fast and has a culture of risks. We will not succeed in blended finance if the public organisations don’t also learn that, not just the money. The private sector also is trying to solve all problems simultaneously. It’s solving problems as they arise. And then ultimately, those drives changes to solve those problems. There are lessons for us in the public sector from the private sector. There are lessons for the private sector in what we do. We need to blend a lot more than our money to be successful.

Raul Herrera

Partner, Arnold & Porter LLP at THK Blended Finance Forum at G20 Bali

Starting here in Indonesia, we have a commitment of all of the G20. Members and many other members interested in this Global Blended Finance Alliance.

Florian Sekinger

Head of Division Sustainable Economic Development, East and South East Asia, KfW Development Bank

KfW with its partner countries is actively setting up structured funds that promote MSMEs through individual legal entities that can also directly invite private investment. We also provide credit enhancement where private investors can invest in secure funds. KfW also has SME credit lines to provide specific credit lines which are tailored to the needs of SMEs. It’s also the aspect of policy-based ethics, which are not really directly investing in individual projects but entering policy dialogue of countries to transform their policies to be more investment friendly. Two ideas: 1) Deepening the capital market with the development of a green capital market (green bond, sustainable finance bonds, GSSP bonds) that can be new opportunities if the structure and viability provide the right incentives. It can also invite new investors looking for ESG investments; 2) Sustainable finances and funds.

Brune Poirson

Chief Sustainability Officer, Accor at THK Blended Finance Forum at G20 Bali

There is no more important place than being in the G20. In the G20, we need a platform for sustainability. And this is really the objective of this forum. It’s a place where we can safely and boldly talk about solutions that we can concretely implement to actually scale up and, and make sure that sustainability gets rolled up faster. We need new ways of collaborating. We need new ways of mobilizing finance with the new technological solutions. And all of that is not only being discussed, but actually implemented through this forum.

Neo Gim Huay

Given the urgency of change, there is the need for us to really look at how public private partners can prototype and testbed. We really need all hands on deck to not look for the perfect solution, but to agree on a potential testbed and a prototype so that if it successful, we can scale it very quickly and proliferate, and if it is not because not all first steps and first experiments will work out well, it is how do the different groups actually come together to refine and enhance the way forward. There are two critical elements to this partnership model working very well. The first is the need for trust, the ability for us to forge a common understanding and to agree on what the common objectives and goals are is very critical for partnerships to work out smoothly because everyone brings their own experience and perspectives of issues. The second idea beyond trust is also that everyone has a hat that they're wearing, whether from the government, private and community sector to do right things based on the rules that we are in, but also with the human conscience.

Leong Wai Leng

Managing Director & Regional Head

APAC CDPQ Global at THK Blended Finance Forum at G20 Bali

I work for a Canadian pension funds CDPQ and I would say that they’ve got 400 billion Canadian dollars worth of assets, and of which, we already have 39 billion in low carbon as of 2021, and we’re going to hit 54 billion by 2025. And globally, when we look at every single asset class that we invest in every single transaction, whether it is public or private, we evaluate it based on its climate intensity.

Sanda Ojiambo

Executive Director and CEO United Nations Global Compact at THK

Blended Finance Forum at G20 Bali

It’s very clear that you know, to address all of the transitions that we need to do, the energy transition, the climate transition, food systems transition, we do need to creatively and innovatively bring together public financing, and private financing in ways that have never done been done before. And THK has come up with an incredible model around how this can work is convening stakeholders around this, but also, I think, more importantly, Indonesia itself is serving as a great case study in terms of what can be done with public and private financing.

So we do look at philanthropy, especially when we talk about blended finance to be catalytic…we need to look at is how do we increase the amount of philanthropic capital that flows to really play that role of risk taker, the role of first loss or even you know, in terms of providing guarantees, if you’re looking at at blending instruments, therefore in Asia, we have wealth growing faster, stronger than anywhere before, we can definitely look at increasing the philanthropic pie.

Uday Khemka

Vice Chairman of the SUN Group and Senior Climate Advisor to the LTIO (Long Term Investment Organisation) at THK Blended Finance Forum at G20 Bali

We’ve been working on climate finance for the last 17 years with pension funds and sovereign wealth funds to look at how the largest sovereign wealth funds and pension funds across the planet could invest huge amounts of money that they want to invest in green infrastructure…this conference is one of the most significant conferences that is taking place in the last 10 years that could move the needle to allow us to move up from the billions to the hundreds of billions of capital.