EIB announces intention to finance two rapid bus transport systems in Indonesia

The European Investment Bank (EIB), the climate bank of the European Union, has announced its intention to finance two rapid bus transport systems (BRTs) in the cities of Batam and Makassar in the Republic of Indonesia. The EIB financing will be part of Team Europe’s broader support to the Indonesian government to reduce the country’s greenhouse gas emissions by up to 41% by 2030. Low-emission urban infrastructure development projects emissions like BRT systems are essential for reducing greenhouse gases globally as cities around the world produce around 70% of all these emissions globally.

Cities in Indonesia’s South Sulawesi Province and Riau Island, home to some 3 million people, have expanded their BRT system projects with support from the Energy Finance for Low Emission Investments – Cities Advisory Facility (FELICITY) – a project preparation mechanism implemented jointly by the EIB and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, and funded by the Ministry’s International Climate Initiative (IKI) German Environment, Nature Conservation and Nuclear Safety (BMU).

FELICITY helps cities around the world develop bankable urban investment projects and thus contribute more effectively to reducing global greenhouse gas emissions, improving health and well-being and enabling a just green transition to carbon neutral cities. The program is active in Brazil, Ecuador, Indonesia and Mexico.

EIB Vice-President Kris Peeters said: “With this commitment to support Indonesia’s low-carbon urban development projects, the EIB is bringing climate to where it matters most: in our cities which emit more than 70% of global GHG emissions. our partners in the EU and Germany, the EIB will help Indonesia to effectively tackle climate change and, at the same time, help unlock major investment opportunities that will accelerate Indonesia’s green economic recovery after COVID-19. It is exactly with these types of investments that we are helping to mitigate the devastating consequences of climate change and boost the transition to the carbon neutral cities of tomorrow.

Senior Environmental, Climate Action and Digital Advisor to the European Union Delegation to Indonesia and Brunei Darussalam Henriette Faergemann said: “The European Green Deal is the European Union’s response to the global crisis climate change and environmental degradation. However, the ambition of the Green Deal will not be achieved by Europe acting alone. This is why the European Union engages with Indonesia as an important partner for climate action, including for low carbon development in urban areas.

The Director of Multilateral External Financing of the Indonesian Ministry of National Development Planning (Bappenas), Dr Raden Siliwanti, said: “The Indonesian government and Bappenas stand ready to support the successful implementation of sustainable transport projects in Makassar and Batam, as a key part of the country’s strategy to reduce greenhouse gas emissions and contribute to global climate action. “

GIZ Country Director for Indonesia and ASEAN, Martin Hansen, said: “Through the joint implementation of FELICITY with the European Investment Bank and our Indonesian partners at national and subnational levels, we are implementing urban climate action. But we must step up our efforts. The smart combination of technical and financial cooperation is the way forward to ensure that funding gaps for low-carbon urban infrastructure investments are effectively addressed in Indonesia – and around the world. “

The EIB announced its intention to finance the two projects supported by FELICITY during the panel on the preparation and financing of low carbon urban infrastructure in Indonesia at the COP26 in Glasgow. The panel welcomed representatives from the EIB, the European Commission, the German government, GIZ, the Ministry of Development Planning of the Republic of Indonesia (BAPPENAS), government officials from South Sulawesi and cities of Makassar and Batam.

Team Europe provides global support for climate action in Indonesia

The development of the two BRT systems in Indonesia has also been supported by the GIZ SUTIR NAMA / INDOBUS program which helps to develop urban transport projects in Indonesia. With technical cooperation in project preparation, advisory services, tailor-made capacity development assistance for the design and structuring of low-carbon infrastructure projects provided by GIZ and FELICITY, and long-term financing. A more affordable term to come from the EIB, Team Europe has provided a program to support local and national climate action plans in Indonesia.

This type of comprehensive support at all stages of project development, including access to more affordable long-term finance, accelerates global climate action by enabling promoters to develop bankable projects according to the standards and requirements. higher rates from international financiers such as the EIB.

The technical cooperation and advice provided by FELICITY is essential for the EIB, as it helps to mobilize investments for low-carbon urban development and shortens the time between demand and financing, thus facilitating rapid and efficient support to climate action efforts.