Based on the preceding analysis of bottlenecks and needs for the development of green finance and investments, this chapter discusses several policies that would be conducive to increasing the supply of green financing from the banking sector and boost corporations’ willingness to undertake green investment in Indonesia. Since Indonesian banks are generally highly liquid, the following policy recommendations are based on the assumption that a scar-city of funds is no major obstacle for them and that their hesitation to develop a green finance business is rather due to a lack of capacity and also a lack of demand from the corporate sector for “green” credit which would increase the sense of urgency for developing these capacities in the financial sector. For corporations, green investments seem to be associated with a fear of losing competitiveness through higher cost as compared to BAU.
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