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Indonesia, in an effort to build a green economy, is boosting green financing services by national banks to companies aiming at addressing environmental issues in the country, officials said at a meeting here Wednesday.
Indonesian Central Bank (BI) Deputy Governor, Ronald Waas, said that national banks were part of the national elements responsible for addressing existing law No. 32/2009 on environment protection and management.
"Neglecting the points stipulated in the law may increase loan, law and reputation risks to banks. Regarding this issue, banks need to better improve risk management related to environment issue," Ronald said in the meeting held at the central bank premises here.
Implementing the Green Financing scheme would improve the banks' awareness on environment risk portfolios that could decrease loan quality as well as the banks' reputation, he said.
The green financing scheme in energy and agriculture sectors was also highly expected to enhance food and energy self- efficiency in the country, said officials attending the meeting held at the central bank premises here.
Ronald said food and energy security would significantly contribute to the development of national economy.
He explained that food and energy security would affect the nation's import and fluctuation of commodity prices, eventually affecting inflation, which would in turn influence the country's currency exchange rate and deficit in foreign payment.
Environment Minister Deputy Imam Hendargo, who was also present at the meeting, said that Indonesia a country that deposits abundant energy including oil, gas, hydro, wind, geothermal, solar and tidal powers.
"The efforts to make green energy as the energy foundation is the real translation of green economy," Imam said.
