EU-Funded S4I Benchmarking Study Tour to Germany for the benefit of PT SMI and its Shareholder (Ministry of Finance)

A Milestone in Advancing Sustainable Infrastructure Development and ESG Driven Decision-making Processes.

PT Sarana Multi Infrastruktur (Persero) (PT SMI) benefitted from a comprehensive benchmarking study tour to Germany, under the Support for Infrastructure Investments in Indonesia (S4I) programme — a collaborative initiative funded by the European Union and implemented by KfW Development Bank assisted by Dornier Group as the Implementation Consultant, with the focus on developing sustainable urban infrastructure and renewable energy projects throughout Indonesia.

The activity focused on enhancing PT SMI’s capacity to implement stringent environmental and social safeguards (ESS) and advancing the integration of environmental, social, and governance (ESG) frameworks in their decisionmaking processes, as well as learning the best practice in the context of climate change for urban infrastructure and renewable energy projects. The central part of the visit comprised KfWled peer-to-peer deep-dive applied knowledge-sharing sessions tailored to the needs of PT SMI participants in the implementation of ESG and ESS following prevailing best practices in implementing internationally accepted ESG Standards for development financing institutions.

The European Union’s support for S4I is instrumental in enhancing the 2 ESG benchmarking session at EnBW, Stuttgart, Germany application of stringent, internationally accepted environmental and social safeguards in infrastructure projects financed by PT SMI. This includes capacity building, applied training, workshops, and the organisation of a dedicated study tour for PT SMI. The benchmarking provided practical experience on environmental and social safeguards applicable to projects and Development Finance Institution (DFI) funding at KfW, as well as private sector project financing in urban infrastructure and renewable energy at EnBW, one of the leading energy sector companies in Germany.

The benchmarking equipped PT SMI and MoF participants with knowledge and tools to be applicable in cooperation with their clients, s uch as s tate-owned enterprises, municipalities, and the private sector. As a frontrunner of ESG standards application in Indonesia, the aim of PT SMI is to contribute to the continuous improvement of project implementation processes of these stakeholders with applicable environmental and social standards, ESG frameworks, and sustainability standards and follow the processes of responsible funding.

The study tour comprised five-workingday intensive interactive programme at KfW and EnBW, combined with 2 site visits to renewable energy and sustainable urban infrastructure projects. PT SMI actively shared and discussed their experience in ESG integration into financing decisions, application of internationally recognized ESS in Indonesia, and contribution to renewable energy transition in Indonesia.

On day one, participants received an introduction to KFW’s promotional mandate, business model, and funding strategies, followed by an in-depth discussion on the sustainability strategy, “TranSform.” Interactive discussion facilitated knowledge transfer and exchange of different DFI roles in the application of impact management, Paris Agreement alignment, ESG risk management strengthening, and financial sustainability reporting under their respective mandates.

On the second day, a detailed presentation of the Impact Management System of DEG (DERa) explained how impact can be measured, managed, and evaluated. Another session discussed the role of KfW in promoting global carbon markets. PT SMI provided a comprehensive overview of its ESG policies, guidelines and regulations constituting the applicable processes and ESMS system in place. A thorough overview of policies, procedures, screening processes and monitoring. Practical examples and the sharing of experience with client feedback sparked lively discussions between KfW and PT SMI on best practices and challenges in the promotion of environmental and social improvement at the level of PT Benchmarking session with DEG at KfW premises, Frankfurt am Main, Germany 3 SMI’s clients as well as participating domestic financing institutions operating not yet at the same demanding level.

On the third day, the participants visited EnBW in Stuttgart, one of the leading energy generating and distribution companies in Germany. EnBW shared experience dedicated to transforming energy supply in Germany and Europe, investing heavily in the expansion of renewable energies, e-mobility systems, and distribution grids, as well as their experience in the promotion of innovative energy and infrastructure solutions through robust research, development, and innovation management initiatives.

Representatives of EnBW showcased to PT SMI participants their sustainability agenda, highlighting that corporate responsibility, climate resilience, and stakeholder management is part of each investment decision along financial and technical sustainability. The main lesson to be learned from this presentation is that sustainability assessment is a key pillar of every decision and strategy. A guided tour by EnBW to one of their waste incineration plants at Stuttgart- Münster (waste-to-energy) provided practical insights into state-of-the-art green urban technologies.

The fourth day featured a visit to Iffezheim run-of-river hydropower plant at the river Rhein, the biggest of its kind in Germany, also run by EnBW, demonstrating a practical example of renewable energy implementation and ESG considerations throughout the whole cycle of its development – from concept, through construction and its operation. Insights into the sustainability approach, highlighting stakeholder engagement, biodiversity, and sustainability procedures, were also shared.

The study tour concluded on the day fifth with a wrap-up session summarizing key messages and takeaways. Closing remarks reinforced the commitment to ongoing collaboration and knowledge exchange. The EU-Funded S4I study tour to Germany provided the 23 PT SMI participants and its stakeholders with valuable knowledge and practical insights into the implementation of ESS and ESG frameworks. PT SMI will further advance its commitment to sustainable infrastructure development in Indonesia underpinned by sustainable impact finance strategies aimed at achieving long-term sustainability goals and advancing the SDGs in Indonesia.

EU-Funded S4I will continue to provide support on further advancement of ESG to become embedded in PT SMI’s ESMS through the provision of peer-to-peer advisory, train-the-trainer programmes, and programme implementation assistance, as well as granting access for PT SMI to KfW ESS training portal developed for development finance institutions.

The EU is not responsible for the contents of communication materials related to EU-funded or co-funded actions prepared by implementing partners. Its contents are the sole responsibility of PT SMI and do not necessarily reflect the views of the European Union.

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