Indonesia Productive and Sustainable Investment Development Policy Loan

active

Prospective

The objective of the Productive and Sustainable Investment Development Policy Loan Program is to mobilize finance and enable markets for productive, sustainable, and resilient investment. The Productive and Sustainable Investment Development Policy Loan (IPSI DPL) supports key reforms to develop the financial sector and enable markets for productive, sustainable, and resilient investment. The operation is aligned with the development priorities of the GOI, anchored by the World Bank’s core diagnostics, and designed to maintain the reform momentum supported by past DPLs. The reforms proposed under this operation are aligned with Indonesia’s 2045 vision and the upcoming five-year development plan. They are anchored around the World Bank’s Country Climate and Development Report (CCDR, 2023), the Growth and Jobs Report (GJR, 2025), and the joint WB-IMF FSAP (2024). The DPL is also aligned with the goals of the Paris Alignment and contributes to Climate Co-Benefits. It is gender-tagged and supports Maximizing Finance for Development (MFD) and Private Capital Enabling (PCE). The DPL also supports reforms that create jobs, most notably in the formal sector and with potentially higher earnings. The choice of a standalone operation reflects the need to account for the transition to a new administration that assumed office in October 2024 and is formulating a new reform agenda. The administration has initiated a ministerial reorganization to strengthen the delivery of its new policy priorities, which is expected to be finalized by March 2025. The DPL supports reforms that operationalize many legislations enacted over the past three years and address short-term priorities set by the new administration. Notably, this operation continues the World Bank’s support of Indonesia's economic policy reforms through successive DPLs. This includes the 2019-2023 financial sector reform DPL series, which culminated in the key legislative reform of the Financial Sector Omnibus Law (FSOL) in 2023, and the 2021 investment and trade DPL that opened more sectors to private investment and boosted competitiveness and business environment.

World Bank Group

Project

Manufacturing (Industrial), Commercial, Government, Residential