Sustainable infrastructure development is believed as one of the main drivers to the recovery path of the economy in a post covid-19 situation.
Infrastructure is the backbone of an economy and as well provides social and economic benefits to society.
Today, PT SMI and KfW signed a grant facility agreement amounting to EUR 16 million under the Support for Infrastructure Investments in Indonesia (S4I) programme, funded by the EU, that aims to promote sustainable investment in municipal development and renewable energy.
This agreement allows PT SMI to assist municipal governments and renewable energy sponsors in project preparation and environmental and social safeguards aspects. KfW will also support PT SMI in the process of becoming Indonesia’s Development Financing Institution. The agreement was signed by Edwin Syahruzad as the President Director of PT SMI and Angela Tormin as the Director of KfW Jakarta Office.
On the same occasion, the EU and AFD signed a Contribution Agreement over EUR 5 million, followed by the signing of grant facility agreement between AFD and PT SMI.
This agreement will accompany AFD’s second green credit line to PT SMI amounting USD 150 million. This grant will support PT SMI in the form of investment premiums, which aim to stimulate the financing of investments to specific project sponsors with higher financial barriers, and SDG Development Facilities, and will assist PT SMI in project preparation. Green and health infrastructure will be targeted.
The Contribution agreement was signed by H.E Vincent Piket, EU Ambassador to Indonesia and Emmanuel Baudran as the Country Director of AFD Indonesia, while the grant facility agreement was signed by Edwin Syahruzad as the President Director of PT SMI, Emmanuel Baudran as the Country Director of AFD Indonesia, and co-signed by H.E Olivier Chambard, Ambassador of France to Indonesia.
"The objective of this agreement is to allow PT SMI to support more investment in municipal and renewable energy projects. The signing of this agreement is yet another demonstration of how SDG Indonesia One’s commitment to tackle this climate change problem with international partners. It will accelerate for the transition to low-carbon economy and also contribute to the post-pandemic economic recovery," Edwin Syahruzad, the President Director of PT SMI, said in a press release on Wednesday.
The cooperation between PT SMI, the EU, AFD and the KfW will not only promote the Sustainable Development Goals (SDGs) and in particular SDG 17: Partnership for the Goals, but also will bring real impact to the climate resilience of communities in Indonesia and at the same time bring recovery of economic growth on the right track.
“As 'Team Europe', the EU and the development banks of Germany and France, we are delighted to support PT SMI in municipal development and renewable energy projects that will support Indonesia’s green recovery. We look forward to working together with all partners to develop sustainable infrastructure in Indonesia. This will contribute to Indonesia’s progress towards the Sustainable Development Goals and benefit the economy, the people, and the environment, said Vincent Piket, EU Ambassador to Indonesia.