Indonesia Highlights Role of a Global Blended Finance Alliance to Support SDG Achievement Through Innovative Financing

NUSA DUA – Following Indonesia's 2022 G20 Presidency agenda to address funding gaps in achieving the Sustainable Development Goals (SDGs) in Indonesia, the Ministry of National Development Planning/Bappenas, along with the Coordinating Ministry for Maritime Affairs and Investment, Ministry of Finance, and Ministry of Foreign Affairs, initiated the formation of the Global Blended Finance Alliance (GBFA). 

"The SDGs cannot be achieved by one country alone. It requires global leadership and shared responsibility. With the G20 Bali Global Blended Finance Alliance, we are working to support the SDGs through innovative financing, and we invite all of you to join us," stated the Minister of National Development Planning Suharso Monoarfa during the G20 Bali GBFA-China-ASEAN Capacity Building on Blended Finance in Bali (23/1).

Based on the Organization for Economic Cooperation and Development’s (OECD) 2021 Global Outlook data, the estimated annual investment needed in key SDG sectors until 2030 total up to USD 3.9 trillion. However, the current funding only amounts to USD 1.4 trillion, creating a gap of USD 2.5 trillion. To address this funding gap, the GBFA was established as a blended financing scheme that leverages additional commercial funding to support sustainable development in developing countries. 

"As a first step, GBFA needs to be implemented at the regional level. For example, GBFA could be integrated with the Bali-Kerthi Development Fund (BDF)," explained Minister Suharso.

GBFA is expected to serve as a platform for knowledge sharing on the implementation and policy innovation of blended finance in developing countries. It aims to harmonize information related to the demand and supply of blended finance projects globally and act as a platform for project preparation or support to the market to propose bankable projects according to blended finance standards. On the same day, Minister Suharso, along with Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan, attended a coordination meeting discussing the launch plan of the G20 Bali GBFA and its Secretariat in Bali at the 10th World Water Forum later this year.

"The implementation of blended finance needs to be adapted to the local context of each country, so the involvement of various stakeholders at different levels is crucial to enhancing blended finance. The Ministry of National Development Planning welcomes all efforts to strengthen the implementation and operationalization of GBFA, including capacity building," concluded Minister Suharso.