ESG can help save budget for infrastructure development: minister

ESG can help save budget for infrastructure development: minister

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Badung, Bali (ANTARA) – The implementation of the environmental, social, and governance (ESG) framework in infrastructure projects would help save the state budget, Finance Minister Sri Mulyani Indrawati said here on Saturday.

“By implementing ESG, we may draw more investment for project funding, which would make the state budget usage not as large as needed,” she explained.

ESG is a global standard practice that prioritizes sustainability, specifically eco-friendliness, social benefits, and sound governance, including in investing and structure development, she informed.

The development of an infrastructure project using ESG will make the project eco-friendly, beneficial, and well-managed, the minister said at the launch of the ESG framework and manual during the Joint Finance and Health Ministers’ Meeting (JFHMM).

Thus, developing an infrastructure project based on the ESG principle could, by itself, help create a reputation that could draw investors more easily.

“It will draw financing more easily since investors will not have to worry about the quality of the project,” Indrawati explained.

Meanwhile, if a project can draw more financing, especially from the private sector, then the role of the state budget will decrease.

The minister called for the development of Indonesian projects using the ESG principle to raise the profile of Indonesia as well as the projects.

“This will draw more investors. Not just overseas, but also domestic, in terms of financing,” she stressed.

Meanwhile, director general of infrastructure financing at the Public Works and Public Housing (PUPR) Ministry, Herry Trisaputra Zuna, said that three projects are currently being developed under a Public-Private Partnership (KPBU) scheme that are implementing the ESG principle.

The three government projects are pilot projects and include the Merangin Jambi Dam and public housing in Cisaranten and Karawang in West Java.

“These three are only the beginning. Later, we will implement them to all KPBU projects initiated by the PUPR, whether they involve drinking water, water resources, toll road, and housing,” he informed. 

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