The Effect of Green Project Financing, Investment Sustainability, and Green Bonds Policy on the Growth of Renewable Energy Industry in Indonesia
DOI:
https://doi.org/10.58812/wsshs.v2i06.974Keywords:
Green Project Financing, Investment Sustainability, Green Bonds Policy, Renewable Energy Industry, IndonesiaAbstract
This study investigates the effect of green project financing, investment sustainability, and green bonds policy on the growth of the renewable energy industry in Indonesia through a quantitative analysis. A cross-sectional survey design is utilized to collect data from stakeholders involved in renewable energy projects, financial institutions, government agencies, and other relevant entities. Structural Equation Modeling (SEM) with Partial Least Squares (PLS) 3 software is employed to analyze the data and examine the relationships between the latent constructs. The findings reveal significant positive relationships between green project financing, investment sustainability, green bonds policy, and the growth of the renewable energy industry. These results underscore the importance of supportive policy frameworks, access to finance, and sustainable investment practices in driving renewable energy deployment. The study contributes to a deeper understanding of the factors influencing renewable energy development in Indonesia and provides valuable insights for policymakers, investors, and practitioners seeking to advance sustainable energy transitions.
References
F. U. Najicha, M. Mukhlishin, S. Supiandi, S. Saparwadi, and D. A. Sulthani, “The Shaping of Future Sustainable Energy Policy in Management Areas of Indonesia’s Energy Transition,” J. Hum. Rights, Cult. Leg. Syst., vol. 3, no. 2, pp. 362–382, 2023.
K. E. Gan, O. Taikan, T. Y. Gan, T. Weis, D. Yamazaki, and H. Schüttrumpf, “Enhancing renewable energy systems, contributing to Sustainable Development Goals of United Nation and building resilience against climate change impacts,” Energy Technol., vol. 11, no. 11, p. 2300275, 2023.
M. Adrian, E. P. Purnomo, A. Enrici, and T. Khairunnisa, “Energy transition towards renewable energy in Indonesia,” Herit. Sustain. Dev., vol. 5, no. 1, pp. 107–118, 2023.
S. Kumar and K. Rathore, “Renewable energy for sustainable development goal of clean and affordable energy,” Int. J. Mater. Manuf. Sustain. Technol., vol. 2, no. 1, pp. 1–15, 2023.
N. A. Pambudi et al., “Renewable energy in Indonesia: current status, potential, and future development,” Sustainability, vol. 15, no. 3, p. 2342, 2023.
The World Bank Group, “Overview Indonesia Country Climate Development Report,” 2023.
T. N. Zahari and B. C. McLellan, “Review of Policies for Indonesia’s Electricity Sector Transition and Qualitative Evaluation of Impacts and Influences Using a Conceptual Dynamic Model,” Energies, vol. 16, no. 8, p. 3406, 2023.
A. Raihan, M. I. Pavel, D. A. Muhtasim, S. Farhana, O. Faruk, and A. Paul, “The role of renewable energy use, technological innovation, and forest cover toward green development: Evidence from Indonesia,” Innov. Green Dev., vol. 2, no. 1, p. 100035, 2023.
F. R. Pratikto and C. Rikardo, “Willingness to pay for green electricity: evidence from a contingent valuation survey in Indonesia,” in IOP Conference Series: Earth and Environmental Science, IOP Publishing, 2023, p. 12035.
H. A. Setiawan and D. M. Nihayah, “The Identifying Factors Affecting Energy Transition Efforts in Indonesia,” Effic. Indones. J. Dev. Econ., vol. 6, no. 2, pp. 210–219, 2023.
R. M. H. Sedera, “The Implementing a Carbon Tax as a Means of Increasing Investment Value in Indonesia,” J. Sustain. Dev. Regul. Issues, vol. 1, no. 2, pp. 39–50, 2023.
G. Selvapandian, P. P. Jeyapaul, and B. Gunabalan, “Adoption Of Green Financing Strategies With Renewable Energy Resources For Global Economic Growth,” Glob. Econ. J., vol. 22, no. 04, p. 2350004, 2022.
F. D. Sulaksana, “Green Financing: One Effort Achieving Sustainable Development,” Bank. Manag. Rev., vol. 11, no. 2, pp. 1592–1603, 2022.
L. Xia, Y. Liu, and X. Yang, “The response of green finance toward the sustainable environment: the role of renewable energy development and institutional quality,” Environ. Sci. Pollut. Res., vol. 30, no. 21, pp. 59249–59261, 2023.
F. Rashid and A. Ullah, “Practices of Green Financing and Sustainable Development: Scope and Complexity,” Int. J. Sustain. Green Energy, vol. 12, pp. 6–12, 2023.
A. Isah, M. O. Dioha, R. Debnath, M. C. Abraham-Dukuma, and H. M. Butu, “Financing renewable energy: policy insights from Brazil and Nigeria,” Energy. Sustain. Soc., vol. 13, no. 1, p. 2, 2023.
B. Geert, “Sustainable investment–Exploring the linkage between alpha,< scp> ESG, and< scp> SDGs,” Sustain. Dev. https//dx. doi. org/10.2139/ssrn, vol. 3623459, 2023.
M. Pompella and L. Costantino, “ESG Disclosure and Sustainability Transition: A New Metric and Emerging Trends in Responsible Investments,” TalTech J. Eur. Stud., vol. 13, no. 1, pp. 8–39, 2023.
W. Coffie, V. O. Fiador, and A. Isa, “Sustainable and responsible investment and asset selection,” Sustain. Responsible Invest. Dev. Mark., pp. 348–363, 2023.
P. Sarajoti, P. Chatjuthamard, S. Papangkorn, and P. Phiromswad, “The environmental, social, and governance (ESG) investment and its implications,” 2022.
J. Y. Abor, “Introduction to Sustainable and Responsible Investment in Developing Markets,” in Sustainable and Responsible Investment in Developing Markets, Edward Elgar Publishing, 2023, pp. 2–10.
G. Sreelekshmi and A. V Biju, “Green bonds for mobilising environmental finance: a conceptual framework for a greener economy,” in Handbook of research on sustainable consumption and production for greener economies, IGI Global, 2023, pp. 160–177.
M. Alamgir and M.-C. Cheng, “Do Green Bonds Play a Role in Achieving Sustainability?,” Sustainability, vol. 15, no. 13, p. 10177, 2023.
D. H. Gabr and M. A. Elbannan, “Green finance insights: evolution of the green bonds market,” Manag. Sustain. An Arab Rev., 2023.
G. Zhunussova, G. Nurmukhanova, and M. Zhexenbek, “Theoretical Foundations of Financial Mechanism for the Development of Renewable Energy,” Econ. Strateg. Pract., vol. 18, pp. 220–231, Jun. 2023, doi: 10.51176/1997-9967-2023-2-220-231.
F. Yao, Y. Song, and L. Xue, “Study on the effect of green financial policies on low-carbon economic development based on evidence from green financial reform and innovation pilot zone,” Environ. Sci. Pollut. Res., vol. 30, no. 30, pp. 74598–74611, 2023.
A. Yunita, F. Biermann, R. E. Kim, and M. J. Vijge, “Making development legible to capital: The promise and limits of ‘innovative’debt financing for the Sustainable Development Goals in Indonesia,” Environ. Plan. E Nat. Sp., vol. 6, no. 4, pp. 2271–2294, 2023.
D. E. Indriastuty, “Constitutional Review of Green Bond Regulation in Indonesia,” KnE Soc. Sci., pp. 543–548, 2023.
I. Prihandono and D. S. Yuniarti, “Indonesia Sustainability Reporting Standard: What Needs to be Improved?,” Padjadjaran J. Int. Law, vol. 7, no. 1, pp. 1–23, 2023.
M. Malahayati and L. Anggraeni, “Potential of and challenges to the green Sukuk for financing the green economic recovery in Indonesia,” Post-Pandemic Green Recover. ASEAN, p. 234, 2023.
S. A. A. Taridala, W. O. Alzarliani, E. Fauziyah, I. S. Rianse, and P. Arimbawa, “Green finance, innovation, agriculture finance and sustainable economic development: the case of Indonesia’s provincial carbon emissions,” Int. J. Energy Econ. Policy, vol. 13, no. 1, pp. 271–280, 2023.
S. K. Park, “15. Sustainable finance in global capital markets,” Res. Handb. Glob. Cap. Mark. Law 0, p. 236, 2023.
F. Ülgen and L. Klapkiv, “An institutional framework for a sustainable eco-transition and financial regulation,” J. Econ. Issues, vol. 57, no. 2, pp. 591–597, 2023.
A. Bachtiar and Y. A. Nainggolan, “Financing For Sustainability and Bank Performance: Case of G-20 Countries,” Int. J. Curr. Sci. Res. Rev., vol. 6, no. 05, 2023.
A. Panagopoulos, “The Use of Sustainable Financial Instruments In Relation To The Social Impact Investment. ESG Policies, Capital Markets’ Approach and Investors’ Protection. An Innovative Perspective,” ESG Policies, Cap. Mark. Approach Investors’ Prot. An Innov. Perspect. (May 25, 2022), 2022.
D. A. Zetzsche, M. Bodellini, and R. Consiglio, “The EU sustainable finance framework in light of international standards,” J. Int. Econ. Law, vol. 25, no. 4, pp. 659–679, 2022.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2024 Loso Judijanto, Rina Destiana, Dwi Dersmi Selan, Budi Sulistiyo Nugroho, M. Ali Mauludin
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Facebook 
Instagram 
Twitter 
Youtube 
+62 821 1557 5700
westscience.journals@gmail.com