After working with the International Finance Corporation, Sandra Pranoto joined GBPN in mid-2020 as a Senior Advisor for the HIDUP initiative in Indonesia. Learn why Sandra is passionate about Green Buildings and how she and the GBPN team are supporting this sector on the ground in Indonesia.
What led to your deep engagement in the Green Buildings sector in Indonesia?
I was excited about the Green Buildings sector from the moment I learned about it. Green buildings are exactly what this country needs, not only because they reduce GHG emissions, but they help change people’s mindsets so that they can live better, be healthier, and save on their homes!
With Indonesian cities growing by over 4% each year, 70% of people are predicted to live in cities by 2050. This has been already causing a huge housing backlog every year. At the same time, nearly 40% of emissions come from buildings, and the average low-income Indonesian family spends 20% of their budget on electricity. So, the government is left with a huge challenge. It must close the housing gap as quickly as possible, while ensuring minimum carbon emissions for the environment and maximum savings for the homeowners!
Yet, the green guildings sector is a ‘foreign’ concept to many emerging countries like Indonesia. We need collaborative efforts from all key stakeholders to make this work. But, once it works, we’ll see significant and sustainable results.
You got in on the ground floor of Green Buildings during your time at the IFC. How did that happen?
I spent more than 15 years at IFC supporting public and private sectors to focus on policy reform in different areas, such as sub-national investment, gender, and taxation for SME. The steps to solve any problem were 1) find a customer with a strong commitment and vision, 2) offer the right resources and expertise 3) produce a successful demonstration model.
Indonesia was struggling to achieve their decarbonization targets. Energy was so cheap that there was no incentive to change. In 2011, the Jakarta government requested our help with Indonesia’s NDC goal to reduce GHG emissions by 26% before 2020, which was revised to 29% by 2030.
In order to make the green guilding policy reform work, the government had to oblige builders to agree to the requirements prior to granting them construction permits. In the first years, the government mandated green buildings requirements only for new buildings of certain large sizes.
The initial work with the Jakarta government resulted in the issuance of the first-ever green guilding regulation in the country was issued in 2012. By June 2019, thanks to governmental efforts on both local and national levels, more than 5,000 buildings had complied with the green guilding requirements in Jakarta and Bandung alone, with a total size of more than 25 million m² -- almost the size of Brunei Darussalam!
Once enough green assets were created from the policy engagement, IFC leveraged them to influence the financial sector, as well as other major sectors. They also introduced the EDGE green building certification in an efficient and affordable way.
This sounds quite successful. What are the lessons learned?
First, the key success factor of any policy engagement is to create a successful demonstration model that works with maximum impact and minimum efforts. Second, the government needs to be bold, focused, and committed enough to make the policy mandatory. Third, the project team needs the collaboration of the government and all relevant stakeholders throughout the process, so that when the policy is out, everyone has the same sense of ownership. This is critical for a successful policy implementation. Fourth, a good communications campaign is a key factor in stimulating a successful, collaborative effort. When a report called ‘Climate Investment Opportunities in Cities’ noted that more than 80% (around $24.7 trillion) of climate investment opportunities before 2030 actually lie in the green guilding sector. When this was shared with the right stakeholders, it unlocked the situation. Fifth, there need to be incentives for homeowners.
In late 2019, for the first time, the Indonesian Central Bank recognized green guilding and gave the first incentives for green-certified homes. Now, the down payment for buying a green-certified home is 5% less than a non-green home. Finally, multiple initiatives from the private sector, private banks, central banks, and both national and local governments must all combine to make this happen.
What is GBPN’s role in Indonesia “on the ground”?
In Indonesia, GBPN set up a collaborative working group of local experts called HIDUP, meaning “life.” The HIDUP approach is to identify and facilitate the advancement of innovative local solutions with the help of GBPN global experts and other resources. HIDUP promotes low-carbon residential buildings in Indonesia. GBPN is one of the few international organizations focusing on green or low-carbon emission buildings with a local approach. The HIDUP working group aims to engage the right local champions as partners and clients. We ask for their policy input and active contribution toward common goals. This bottom-up collaborative approach will help instill a high sense of project ownership among all HIDUP members.
One of HIDUP’s first tasks was to identify the quick wins that could form a replicable model for other Indonesian cities. In late August, the HIDUP Core Working Group, led by the Local Program Coordinators (Matthieu Caille, Verena Streitferdt and Mei Batubara) identified several quick wins. One is a policy engagement on low-carbon residential buildings in Samarinda, the capital city of the East Kalimantan province. This city is located next to the future Indonesian capital, scheduled to launch in 2024. The policy engagement with Samarinda will help the city plan for more livable residential housing. Samarinda will be the fourth city with a green building policy and the first with a sole focus on residential housing.
GBPN’s global network of local experts is the right organization for capacity building and local upskilling. GBPN’s experience working with various climate sectors will also benefit the country by providing innovative solutions that are bankable and investment-ready, so that the private sector can invest in the country’s green economy. GBPN can also address the sustainable building skills gap in the country by working closely with universities and other institutions which can introduce sustainable building concepts and measures. When the students graduate, they are equipped with good sustainable guilding knowledge to implement in the market.
And what would you say to one of those students who may want to enter the Green Building sector after graduation?
I would say, come right along and help us build a greener future with lower carbon emissions, cheaper energy, less use of water, and better homes. Sustainable buildings is about creating major, sustainable benefits for everyone: paying less, and gaining more. We won’t be able to do this without you! So, let’s green the future together!
Interview by Denise Silber for GBPN