Ecobiz.asia – The Asian Infrastructure Investment Bank (AIIB) and Germany’s KfW Development Bank are coordinating up to US$850 million in financing to support Indonesia’s climate resilience and adaptation agenda, combining policy-based lending with reforms aimed at attracting investment in climate-resilient infrastructure and ecosystem protection.
The two institutions signed a memorandum of understanding (MoU) on the sidelines of the 2026 IMF and World Bank Group Annual Meetings in Bangkok to coordinate their support for Indonesia’s Climate Adaptation and Green Resilient Program, Sub-Program 1, known as CARE CPBF.
Under the arrangement, AIIB is providing US$500 million in policy-based financing, while KfW aims to provide €300 million, equivalent to approximately US$350 million. The financing will support policy and institutional reforms intended to strengthen climate resilience while promoting sustainable economic growth.
The program, coordinated by Indonesia’s Ministry of National Development Planning (Bappenas), covers climate-smart agriculture, irrigation management, village financing and social forestry, as well as mangrove protection, environmental management and ecosystem services. It also supports climate-resilient financing at the subnational level, solid waste management and water supply.
Ludger Schuknecht, AIIB vice president for policy and strategy, and Brigitte Réthier, a member of KfW’s executive board, signed the MoU.
“This partnership brings together the complementary strengths of AIIB and KfW in support of Indonesia’s climate policy reform agenda,” Schuknecht said on Wednesday (Oct. 28, 2026). “Our financing can help accelerate the implementation of critical reforms and mobilize investment.”
He also highlighted KfW’s experience in Indonesia and technical expertise, saying the institutions could combine financing, policy dialogue and technical assistance to advance climate resilience and sustainable development.
Réthier said the reforms could help create conditions for climate-resilient investment and ecosystem protection.
“KfW is pleased to contribute our decade-long experience in forest protection projects in Indonesia. This partnership reflects our responsibility as a bank to address global challenges such as climate change and strengthen international relations,” she said. ***
