Citation:

Muhammad Ryan Romadhon, Siti Mutmainah. "Harnessing Green Sukuk for Sustainable Development in Indonesia" International Research Journal of Economics and Management Studies, Vol. 2, No. 2, pp. 343-351, 2023.

Abstract:

The climate change crisis that occurs in Indonesia is a global problem that requires solutions to overcome it. The presence of Green Sukuk in Indonesia is expected to be able to support sustainable development programs and commitments to reduce greenhouse gas emissions in Indonesia. The allocation of funds from the issuance of Green Sukuk was used for green projects run by the government in 2019 and 2020, namely Energy Efficiency, Renewable Energy, Sustainable Transportation, Waste and Waste Management for Energy and Climate Change Resilience for Disaster-Prone Areas. Green Sukuk in Indonesia is issued using Akad Wakalah by way of bookbuilding, with reference to the fatwas of the National Sharia Council – Indonesian Ulema Council (DSN-MUI). Green Sukuk issuance in Indonesia has 9 Eligible Sectors that are targeted for Green Sukuk financing projects.Indonesia has committed to finance green projects to prevent environmental damage with Green Sukuk financing, but financing using this instrument remains a challenge that must be borne by investors, government and corporations. To minimize the risk of sukuk development, policymakers must make new policies in managing all financial risk apects of sukuk in order to provide stability in prices that will affect investor interest in investing through Green Sukuk.

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Keywords:

Green Sukuk, SDGS, Harnessing, Risk Financing.