Indonesian regulator to implement “green-financing” measures
(23 November 2015 – Indonesia) Indonesia’s financial regulator, known as OJK, will introduce rules to restrict banks’ lending to environmentally-damaging projects by 2018, in an attempt to forest fires that covers parts of Southeast Asia with thick smoke for months on end.
Edi Setijawan, the regulator’s deputy director for banking has this week said it is aiming to draft regulations by next year to target agriculture, energy, fishery and microfinance companies. The rules will be in addition to guidelines for sustainable financing in the palm oil industry that the country’s eight largest banks will test starting in January, he said.
“We can’t ban banks from lending to any non-sustainable projects as the economy would grind to a halt, but that’s something we’re moving towards,” Setijawan said.
“Later on, banking can also be used to prevent what happened a few months ago, the terrible haze.”
He added, over the next three years, the regulator may ask banks to invest in companies and projects deemed sustainable, in order to offset any funds given to non-environmentally friendly activities.
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