UNEP and Indonesia’s Financial Authorities Chart a Shared Path for PAGE Indonesia Phase II
Jakarta/Zoom Meeting (Hybrid), November 10, 2025 - On a warm Monday afternoon in Jakarta, representatives from Indonesia’s Ministry of Finance, OJK, Bank Indonesia, Bappenas, and the Indonesia Environment Fund (BPDLH) gathered with the United Nations Environment Programme (UNEP) for a conversation that felt both strategic and hopeful. The discussion marked an important moment: the shaping of UNEP’s workplan for the second phase of PAGE Indonesia, a phase expected to deepen the country’s transition toward a circular and sustainable economy.
The meeting opened with UNEP’s reflections on Indonesia’s growing ambition in the circular economy space. The country is pushing toward a circular input rate of 10 percent by 2029—an impressive national target that touches everything from food systems to plastic packaging. Yet behind these ambitions lies a significant financial challenge: achieving the circular economy vision requires more than USD 21 billion each year, in addition to broader climate financing needs that could reach USD 472 billion by 2035. With government budgets covering only a fraction of that amount, Indonesia must rely on the alignment of public, private, and innovative financing.
BPDLH’s Director, Mr. Joko, offered one of the clearest reminders of this point. He described how Indonesia's Environment Fund has been intentionally designed not just to finance projects, but to build an entire ecosystem around them. The Fund now manages around USD 1.7 billion and supports initiatives across multiple sectors—community-driven waste management, circular SMEs, green infrastructure, climate mitigation, and more. He spoke passionately about Indonesia’s “4P model”—People–Public–Private Partnerships—where public funding is combined with private sector CSR and UN-supported de-risking tools. When these elements come together, he said, local circular economy ideas can grow into national best practices.
He smiled when he said, “When you visit Jakarta, please contact us. We want to collaborate in concrete ways—not only concepts, but the real work of finding the money and helping communities.”
Bank Indonesia’s representatives brought another dimension to the story. Since receiving a new sustainable finance mandate in 2023, the central bank has been shaping policies that encourage banks to expand green lending. They shared how incentives have been designed to make electric vehicles and green housing more affordable, and how liquidity support of more than IDR 35 trillion has been made available to encourage banks to finance green projects. Their annual Green Banking Awards—where top-performing banks are recognized in front of national leaders—have quietly shifted the financial sector’s culture, making sustainability a competitive advantage.
Yet perhaps the most forward-looking initiative is BI’s work with SMEs. Over the past few years, the bank has been helping thousands of small and medium enterprises build business models that qualify for green financing. The challenge, they explained, lies in distinguishing “green activities” from “green businesses.” While Indonesia’s taxonomy identifies the former, BI is developing a system to label entire SMEs as green—a more holistic approach aligned with market expectations. Circular economy-focused SMEs are expected to be part of this classification next year.
OJK and the Ministry of Finance also sit at the heart of this transformation. Both institutions are preparing to strengthen coordination through a new Sustainable Finance Committee, a long-awaited platform that will harmonize regulations and formalize Indonesia’s green taxonomy. Their representatives stressed the importance of ensuring that UNEP’s future work supports this broader direction, especially in terms of training financial institutions and aligning with regulatory priorities.
Throughout the meeting, UNEP presented its proposed activities for the new PAGE phase: refining a national circular economy financing model, strengthening the current financing framework, and designing capacity-building tools for banks and financial institutions. What UNEP heard in response was clear and consistent: Indonesia does not need to start fresh. The country already has the institutions, the policies, and the early-stage mechanisms in place. What it needs now is support to sharpen, scale, and harmonize these efforts—and to build capacity where gaps remain.
There was a shared sense of optimism in the room. As the conversation progressed, it became evident that Indonesia’s journey toward a circular economy is no longer an abstract policy aspiration. It is becoming concrete, backed by institutions, budgets, blended finance, community innovations, and national plans that span decades.
By the end of the meeting, a collective direction had taken shape. UNEP committed to refining its plans in close collaboration with all institutions present. BPDLH welcomed deeper cooperation to further evolve the financing ecosystem. Bank Indonesia opened the door to partnerships through its training institute. OJK and the Ministry of Finance emphasized the importance of alignment with regulatory developments. And all partners agreed to continue the dialogue, transforming their shared aspirations into practical, measurable outcomes.
As the participants logged off or left the meeting room, the momentum felt real. The second phase of PAGE Indonesia is no longer just a workplan—it is a partnership, built on trust, experience, and a shared belief that Indonesia’s circular and low-carbon future is within reach when institutions move forward together.