Indonesia

In Indonesia, the focal area of the environment and natural resources includes forestry protection and biodiversity, as well as waste management. In the area of forestry protection, six REDD projects are currently being implemented, including one to protect mangrove forests, the “nursery” for many species of tropical fish. With these projects, KfW is playing a pioneering role internationally. REDD stands for “Reducing Emissions from Deforestation and forest Degradation”. Indonesia is still losing two million hectares of forest annually due to illegal logging, slash and burn practices and concessions. With its projects, KfW aims to show that local development, sustainable forestry, the conservation of biodiversity and climate protection can go hand in hand. Village communities which live in and from forests are top of the agenda. The projects help the communities to manage forests sustainably.

Project information – Solid Waste Management (PDF, 191 KB, non-accessible)

Project information – Forest (PDF, 153 KB, non-accessible)

Renewables, energy efficiency projects and urban development projects are promoted through the focal area of climate and energy. In Indonesia the potential for geothermal energy is particularly high. However, it is very costly and risky to exploit possible geothermal sources. Several geothermal projects are currently being rolled out, and the same applies to hydropower and solar power projects. Two programme financing schemes have already been implemented in the energy sector, jointly with the World Bank and the Asian Development Bank (ABD), with another scheme due to follow. Market-oriented promotional loans are deployed, as well as low-interest loans that are enabled through German Federal Government budget funds.

Municipal waste management is rarely able to meet the increasing demand from citizens and companies. This is why, on behalf of the German Federal Government, KfW is financing a waste disposal programme in five cities, with a further programme in the pipeline.

Project information – 1000 Islands (PDF, 160 KB, non-accessible)

In the area of vocational training, preparations are currently underway for a programme financing scheme, co-financed with the ADB. The funds will be used to finance reforms in Indonesia’s vocational training system, meaning that more qualified professionals will be trained to join the labour market. The reforms put Indonesia in a position to take advantage of the boom that is expected to follow the coronavirus pandemic, by further integrating Indonesia into international value creation and supply chains as a production location. The commitment should ensure that young people find better paid work, while boosting the competitiveness of the economy and reducing poverty.

Large-scale coronavirus aid programmes, structured as co-financing with the ADB, are already being rolled out. In this context, funds are provided for the health sector and to support small businesses and those in particular need during the crisis.

In the health sector, KfW is currently supporting the nationwide COVID-19 vaccination programme, the further development of university hospitals and the fight against tuberculosis on behalf of the German Federal Government.

KfW is financing the results-based COVID-19 vaccination programme together with the World Bank, among others. The project aims to increase the Indonesian population's immunity to COVID-19 and reduce the number of illnesses and deaths in order to help relieve the burden on Indonesia's health system. The project focuses on the logistics of vaccine distribution.

Through the further development of university hospitals in Makassar on Sulawesi (since 2017) and in Malang on East Java (since 2022), KfW is also making a direct contribution to improving healthcare for around 48 million people. The two projects are complemented by funds from an EU-financed COVID-19 aid programme.

2021 KfW also signed a debt conversion agreement between Indonesia, the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM) and KfW on behalf of the German Federal Government. The funds finance measures to combat tuberculosis, which are implemented through the Global Fund.