GREEN BONDS IN INDONESIA: SYNERGY BETWEEN BANK INDONESIA AND OTORITAS JASA KEUANGAN

Abstract

Green bonds promoted by the World Bank have supported developing countries in to mitigate climate change. Indonesia is one county that has issued green bonds through Bank Indonesia and Otoritas Jasa Keuangan (the Indonesian financial services authority or OJK). The synergy between these institutions in issuing green bonds has contributed to their effectiveness. Thus, this research focuses on (1) regulation of green bonds by the world bank, (2) collaboration between Bank Indonesia and OJK in facing the future threat, and (3) the implementation of the World Bank’s green bonds program in contributing to Indonesia’s environmental programs. The research illustrates that the World Bank regulation of green bonds consists of soft law recommendations as guidance for countries’ national laws. In their collaboration, BI and OJK are now focusing on developing a Sustainable Finance Instruments (SFI) to stimulate the growth of a green and sustainable economy. In Indonesia’s Environmental Development, the OJK has complimented most of the World Bank’s principles on green bonds regulation. However, the OJK needs to improve the principle of the green bonds-based project. This research is normative-descriptive, applying legal and conceptual approaches to addressing these issues problems.