Strategies for Enhancing Green Financing Implementation to Support Sustainable Infrastructure Development in Indonesia

Abstract

Sustainable infrastructure development is essential for achieving the Sustainable Development Goals and Indonesia’s net-zero emissions target; however, green financing implementation remains constrained by weak governance, limited institutional capacity, fragmented regulations, and restricted access to appropriate financing schemes. This study aimed to assess stakeholders’ understanding and implementation of green financing, identify existing barriers, and formulate strategies to strengthen its contribution to sustainable infrastructure development in Indonesia. An explanatory mixed-methods design was employed. Quantitative data were collected through questionnaires administered to 50 purposively selected stakeholders from the construction and financing sectors and analyzed using descriptive statistics. Qualitative data were obtained through interviews with 10 key informants, analyzed using thematic and Fishbone analyses, and validated through a focus group discussion involving seven experts. The results showed that green project implementation achieved a high mean score of 3.50, whereas accountability and transparency received lower ratings, with mean scores of 2.48 and 2.36, respectively. Seven barrier dimensions were identified: human resources, methods, financing, technology and data, environment, measurement, and regulation. The analysis generated six priority strategies: capacity building, regulatory strengthening, development of attractive financing schemes, enhancement of transparency and accountability, digitalization, and multi-stakeholder collaboration. The study concludes that expanding green financing requires integrated institutional, regulatory, financial, technological, and collaborative reforms alongside established environmental sustainability practices.