Indonesia Blue Finance Landscape

This report by the Climate Policy Initiative analyzes the blue finance landscape in Indonesia between 2015 and 2019, focusing on the sources, instruments, and recipients of funding for the blue economy. It highlights the dominance of public international finance and commercial banks, while detailing the significant barriers faced by micro, small, and medium enterprises (MSMEs) in the fisheries sector, including collateral requirements and geographic disparities in loan distribution.

• Public international finance is the primary driver of Indonesia's blue finance, with commercial banks serving as the most prominent private source. Between 2015 and 2019, commercial banks contributed more than USD 327 million to blue finance.
• Commercial loans are the most common blue finance instrument, primarily targeting water and waste infrastructure. Other instruments, such as grants, equity, and low-cost project debt (concessional loans), are used in relatively similar amounts.
• Government agencies are the primary recipients of blue finance because most tracked funds are Official Development Assistance (ODA). Public finance is largely directed toward water, wastewater, and disaster risk management, while the Marine and Fisheries Capital Fund Agency (LPMUKP) focuses on improving capital access for marine and fishery communities.
• MSMEs make up 99.99% of enterprises in Indonesia and contribute 14-16% of total exports, yet they face significant barriers to bank credit. A primary obstacle is that commercial banks require physical collateral, which many MSMEs lack.
• MSME loan distribution is geographically skewed, with approximately 59% concentrated in Java. However, the highest average annual growth of MSME loans (from 2017 to mid-2021) is found in the Lesser Sunda Islands.
• While wholesale and retail sectors dominate MSME loans, the fisheries sector's share of loans has shown a consistent upward trend, growing from 0.67% in 2017 to 1.06% in 2021.
• Indonesia's regulatory environment for starting a business is challenging; it ranks #140 globally for ease of starting a business. Specific hurdles include high costs for registering property and lengthy documentary compliance for trading across borders.

APA

Climate Policy Initiative (2022). Indonesia Blue Finance Landscape. https://www.climatepolicyinitiative.org/wp-content/uploads/2022/06/Indonesia-Blue-Finance-Landscape-Final-1.pdf

Chicago

Climate Policy Initiative. Indonesia Blue Finance Landscape. 2022. https://www.climatepolicyinitiative.org/wp-content/uploads/2022/06/Indonesia-Blue-Finance-Landscape-Final-1.pdf.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Indonesia Blue Finance Landscape |date=June 2022 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2022/06/Indonesia-Blue-Finance-Landscape-Final-1.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2022indonesia, author = {{Climate Policy Initiative}}, title = {{Indonesia Blue Finance Landscape}}, institution = {Climate Policy Initiative}, year = {2022}, month = jun, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2022/06/Indonesia-Blue-Finance-Landscape-Final-1.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }