TEMPO.CO, Jakarta - Acting Director General of Financial Sector Stability and Development (SPSK) at Indonesia’s Ministry of Finance, Herman Saheruddin, revealed that the average government expenditure to address climate issues reached Rp73.5 trillion per year during the 2018-2024 period.
"Climate-related spending accounts for around 3 percent of the state budget, with an average annual expenditure of more than Rp70 trillion," said Herman Saheruddin at the Maybank Indonesia Sustainable Finance Forum 2026 in Jakarta on Tuesday, as quoted by ANTARA.
He said the figure reflects the government's strong commitment to addressing climate issues. However, it also highlights the continued large climate-related financing gap.
According to data from the National Development Planning Agency (Bappenas), Indonesia needs Rp794 trillion to Rp800 trillion per year to achieve its Net Zero Emission (NZE) target by 2060.
"Therefore, public spending should not be seen as a final solution, but rather as a catalyst that encourages greater participation from the private sector," he said.
Herman stated that the government is positioning the state budget not as the primary source of climate financing, but as a catalyst that reduces investment risks, strengthens investor confidence, and encourages much greater participation from the private sector.
He also believes that sustainable development will only succeed if the government and market players cooperate to address climate issues. This is because a comprehensive, diversified, and collaborative financing ecosystem is needed to realize Indonesia's climate targets.
"Therefore, Indonesia has developed a climate finance architecture that combines resources from the public and private sectors, as well as from domestic and international partners," Herman said.
He explained that in terms of public financing, climate financing is supported through the state budget (APBN), regional government spending, fiscal incentives, and innovative financing instruments such as Green Sukuk, SDG Bonds, Blue Bonds, and the Disaster Pooling Fund.
In addition, the government continues to encourage increased support from the banking sector, capital markets, carbon markets, philanthropy, corporate investment, blended finance, and international cooperation through multilateral development banks, bilateral partners, and international financial institutions.
"Each funding source must complement the others so that climate action can be implemented at the required scale and speed," Herman said.
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