Germany will provide 2.5 billion euros (US$2.98 billion) in development assistance over the next five years for infrastructure initiatives in Indonesia. The funds will fall under the German-Indonesian climate initiative, and will be channelled via KfW Development Bank.

KfW acts on behalf of the German federal government, primarily the Federal Ministry for Economic Cooperation and Development.

The planned projects cover the areas of urban mobility, waste management, and water supply. They will include the construction and expansion of suburban railway systems and better transport links between the periphery and city centres of densely populated areas through energy-efficient commuter trains, the construction of landfills and waste incineration plants, the construction of modern sewage treatment plants, and the expansion of water supply systems.

Reducing car traffic and the resulting air pollution, reducing and recycling waste, and lowering the amount of waste entering the oceans will sustainably improve the living conditions of local populations, according to the bank.

“Indonesia is among the countries with the highest CO2 emissions in the world," notes Günther Bräunig, chief executive officer of KfW Group. "That is why green infrastructure is also the key to the country’s sustainable economic growth and development. We are supporting Indonesia in its efforts to achieve the Paris climate targets and to launch climate change mitigation and adaptation measures. The innovative projects that receive funding are part of an extensive transformation of Indonesia’s infrastructure in the areas of transport, waste management, water supply and sanitation.”

As one example, the suburban railway in Surabaya, Indonesia’s second largest city, will be expanded, with 230 million euros earmarked for the project. The planned 120 kilometres of rail network are intended to connect as many as 500,000 people to sustainable local public transport and at the same time reduce CO2 emissions by up to 100,000 tonnes per year.

Work is already underway to improve the water supply for 450,000 inhabitants in four cities in Central Java for around 90 million euros. KfW also intends to provide 200 million euros in support of Indonesia’s action plan to reduce plastic waste in the ocean by 70%. Some of the projects are part of the Clean Oceans Initiative which was established in 2018 and aims to reduce plastic waste in the oceans.

Since 2011, Germany and Indonesia have agreed on climate-related measures with a volume of 1.4 billion euros.