New report sets out roadmap to financing sustainable waste infrastructure in Indonesia
The UK is uniquely placed to help Indonesia deliver the infrastructure needed to tackle waste sustainably, according to a new report released today [2 September 2020].
Commissioned by the City of London Corporation and produced by Macquarie’s Green Investment Group (GIG), the document outlines key actions that can be taken in the UK and in Indonesia to resolve urgent issues facing the country’s waste management system, particularly in relation to plastic.
Global plastics use has increased twenty-fold in the past 50 years and is expected to double again in the next 20. Yet plastic waste management infrastructure, from sorting, recycling and recovery, has not kept up with the rise in production around the world, leading to pollution in the natural environment and associated impacts on local communities.
Alongside Indonesia’s rise in domestic plastic waste, it is also one of the main recipients of exported plastic waste. If current rates of plastic waste collection and treatment are maintained in line with increasing waste generation, leakage of plastics into Indonesia’s water bodies is projected to increase 30% by 2025 and more than double by 2040. The situation is already costing the coastal tourism industry $13 billion per year and impacting the 3.7 million Indonesians working in the fishing industry.
Earlier this year, the Indonesian Government set out ambitious plans to reach near zero plastic pollution by 2040. However, difficulties remain around raising the necessary finance to deliver this vision, with around £19 billion of investment required to achieve appropriate levels of waste collection, sorting, recycling, recovery and disposal over the next 20 years.
As home to some of the world’s most experienced waste firms, and with an extensive green finance and sustainable infrastructure aid programme, including Partnering for Accelerated Climate Transitions and the Global Infrastructure Programme, the report finds the UK is uniquely placed to support Indonesia in its waste management goals.
Following discussions and interviews with government bodies, development banks, international infrastructure investors and other relevant parties, the report presents an overview of the policy measures that can be taken to help unlock private sector investment into sustainable waste management infrastructure in Indonesia, including:
- The creation of a new Waste Management Authority by the Government of Indonesia;
- Greater support and expertise sharing by the UK government and relevant bodies, for example on Extended Producer Responsibility scheme design;
- Waste to be included in the UK’s Economic and Financial Dialogues in South-East Asia;
- UK Export Finance (UKEF) to explore how it could support UK investment into Indonesian waste infrastructure;
- The creation of a Waste Management Development Fund concept in order to provide bridging support for municipalities in their development of waste infrastructure.
The report was produced for the City of London Corporation by GIG’s Climate Finance Advisory Team.
Lord Mayor of the City of London William Russell said:
"Indonesia has shown tremendous leadership in tackling a critical environment challenge for us all - plastic waste.
“But if the country is to meet its goal of zero plastic pollution by 2040, it urgently needs to raise the finance for critical waste infrastructure.
“I hope this report helps support those efforts, providing clear actions for private investors, the UK Government, and the Government of Indonesia to tackle many of the issues currently faced.”
Edward Northam, Head of GIG UK and Europe, said:
”Tackling the global waste challenge is an essential part of the green transition, but the scale of the challenge means a significant volume of private sector capital is required to meet it.
“Having committed over £1bn in debt and equity into waste and bioenergy projects across the globe, we know exactly what it takes to mobilise the private sector in this area.
“We hope the report sets out a clear roadmap for the public and private sectors of the UK and Indonesia to work together to unlock this c.£19 billion investment opportunity and eradicate Indonesia’s plastic problem.”
Notes to editors
About the City of London Corporation
The City of London Corporation is the governing body of the Square Mile dedicated to a vibrant and thriving City, supporting a diverse and sustainable London within a globally-successful UK. www.cityoflondon.gov.uk
About the Green Investment Group
Macquarie’s Green Investment Group (GIG) is a specialist in green infrastructure principal investment, project development and delivery, green impact advisory and the management of portfolio assets. Its track record, expertise and capability make it a global leader in green investment and development, dedicated to accelerating the green transition. For more information, visit www.greeninvestmentgroup.com and www.macquarie.com.