Under the German-Indonesian climate initiative, Germany has agreed to provide EUR 2.5 billion (USD 2.98 billion) in loans to fund Indonesian infrastructure projects within five years towards reducing carbon emissions in Indonesian cities. The funds will be channeled via KfW Development Bank, which acts on behalf of the German federal government.
The planned projects will be carried out in the areas of urban mobility, waste management, wastewater, and water supply. These activities include the construction and expansion of suburban railway systems and better transport links between the periphery and the city centers, the construction of landfills and waste incineration plants, the construction of modern sewage treatment plants, and the expansion of water supply systems.
For example, the suburban railway in Surabaya, Indonesia’s second-largest city, will be expanded, with EUR 230 million (USD 278 million) earmarked for this project. The planned 120 kilometers of the rail network are intended to connect as many as 500,000 people to sustainable local public transport and at the same time save up to 100,000 tonnes of CO2 per year. Work is already underway to improve the water supply for 450,000 inhabitants in four cities in Central Java for around EUR 90 million (USD 108.9 million).
The German-Indonesian climate initiative will be conducted in close cooperation with GIZ, Germany’s federal enterprise operating in the field of international cooperation for sustainable development. Accordingly, GIZ will provide complementary advisory services, identify potential infrastructure projects, and prepare them as part of a preliminary assessment. KfW will then enable the projects to be financed and subsequently implemented.
(Sources: The Asset; KfW Development Bank)