The EU bank is set to finance low-carbon urban infrastructure projects in the city of Batam and Metropolitan Makassar, Indonesia to develop two bus rapid transit (BRT) systems.

The two BRT projects will help Indonesia to reduce CO2 emissions and contribute to global climate action.

The European Investment Bank (EIB), the climate bank of the European Union, has announced its plans to finance two bus rapid transit systems (BRT) in the cities of Batam and Makassar in the Republic of Indonesia. The EIB financing will be a part of wider Team Europe support for the Government of Indonesia in reducing country’s greenhouse gas emissions by up to 41% by 2030. Low-carbon urban infrastructure development projects like the BRT systems are key to reducing global greenhouse gas emissions as cities worldwide produce some 70% of all these emissions worldwide.

The cities in the South Sulawesi Province and Riau Island of Indonesia, home to some 3 million people, developed their BRT system projects with support from the Financing Energy for Low-carbon Investment - Cities Advisory Facility (FELICITY) - a project preparation facility jointly implemented by the EIB and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, and funded by the International Climate Initiative (IKI) of the German Ministry of Environment, Natural Conservation and Nuclear safety (BMU).

EIB Vice President Kris Peeters said: “With this commitment to support Indonesia`s low-carbon urban development projects the EIB is taking climate there where it matters most: to our cities which emit more than 70% of the world’s GHG emissions. Together with our partners from the EU and Germany, the EIB will support Indonesia in addressing effectively climate change, and at the same time, help unlocking major investment opportunities that will accelerate the green economic recovery of Indonesia from COVID-19. It is exactly with this type of investments that we contribute to mitigating the devastating consequences of climate change and stimulate the transition to the carbon-neutral cities of tomorrow.”

The EIB announced its intention to finance the two FELICITY-supported projects during the Low-carbon urban infrastructure preparation and financing in Indonesia panel at COP26 in Glasgow. The panel hosted representatives of the EIB, European Commission, German Government, GIZ, Ministry of Development Planning of the Republic of Indonesia (BAPPENAS), officials of the South Sulawesi Government, and the cities of Makassar and Batam.