Innovative Financing Instruments for Sustainable Development Goals
In an effort to achieve the Sustainable Development Goals (SDGs), the development of innovative financing instruments is one of the strategic steps that need to be taken. This includes strengthening regulations, institutions, and financing management schemes that are not only effective, but also efficient.
Among these schemes, Green Economy, Blue Economy and Public-Private-People Partnership (4P) financing are the main focus. These three schemes are expected to optimise existing resources to create positive social and environmental impacts.
With the increasing need for development funding, the challenges faced are increasingly complex, especially in fulfilling public facilities and infrastructure. In this context, the financial capacity of non-governmental institutions has also grown significantly.
Therefore, the government is committed to encourage and facilitate the utilisation of blended finance as a solution to finance social and economic infrastructure projects.
This approach not only covers large-scale projects, but also includes small and medium-scale projects, which have the potential to provide direct benefits to the community.
Funding mix is the synergy and integration of various funding sources, including philanthropic funds, corporate social funds, religious funds, as well as contributions from local governments. This approach aims to create a more inclusive and sustainable financing structure.
A concrete example of the application of this funding mix is the Singkawang Airport development project. This project demonstrates how various funding sources can work together to achieve a common goal, while increasing the efficiency and effectiveness of the use of funds.
Strengthening funding synergies is also done through collaboration between levels of government. One of the mechanisms developed is grants to regions through output-based transfers.
This mechanism is designed to ensure that the allocation of funds is done by considering the results and impacts of the activities carried out. Thus, the potential for duplication in the allocation of activities can be minimised, so that existing resources can be used optimally.
Overall, the development of innovative financing instruments is critical to achieving the Sustainable Development Goals. Through strong synergies between the government, private sector and communities, it is expected that the necessary funding for development projects can be better met.
By utilising the financing mix and strengthening collaboration between stakeholders, we can create a more sustainable and inclusive future for all people.
Source: Bappenas
