IsDB chief in Jakarta: A US$2.56 billion plan with a missing climate pillar

Dr Muhammad Al Jasser, chairman of the Islamic Development Bank (IsDB) Group, spent four days in Jakarta, from 7 to 10 October 2026. The IsDB is a development bank owned by 57 mostly Muslim countries. It pays for roads, hospitals and farms using Islamic finance rules, which avoid interest.

He left behind a five-year plan worth billions of dollars. It is a useful plan with one large hole. In a country that is among the most exposed to climate change, the plan has no climate pillar.

On 8 October, Finance Minister Suahasil Nazara launched the partnership strategy for 2026 to 2030, the fourth of its kind. The bank attached an “indicative” figure of about US$2.56 billion. Indicative means a target, not a cheque. Money flows only when each project is approved and signed.

The plan has two pillars. Al Jasser outlined the first as infrastructure: transport, food and farming, fisheries, and energy security and transition. The second is people: health, schools and job skills. Climate appears only in that one phrase, “energy transition”. There is no climate goal, no share of the money set aside for it, and no plan for adapting to floods, rising seas and drought.

This gap matters because Indonesia’s risks are real. The country still depends heavily on coal for electricity. Jakarta and many coastal cities face rising seas, and farmers face longer dry seasons. Every port, road and rice field the plan pays for will have to survive that climate.

The gap is also hard to explain from the bank’s side. Research group E3G found that climate projects made up 46 per cent of IsDB operations in 2023, beating the bank’s own target. Yet from 2019 to 2022 it lent far more for fossil fuels than for clean energy. Indonesia’s plan follows the old habit, not the new target.

Each pillar can still turn green. Roads and ports can be built to resist floods. Food projects can favour crops that survive drought, without clearing forests for new farmland. Fisheries support can protect mangroves, which shelter coasts and store carbon. A bridge washed away in its tenth year is a loan repaid for nothing.

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The people pillar fits too. Heat and floods spread diseases such as dengue, so stronger clinics are a form of climate protection. Vocational schools can train workers for solar power, electric transport and energy-saving buildings.

Scale makes this choice urgent. Over five decades the IsDB Group has approved about US$7.2 billion for some 350 projects in Indonesia. The new plan equals more than a third of that history in five years. Still, about half a billion dollars a year is small for a country of more than 280 million people, so every dollar should serve two goals: growth and climate safety.

Islamic finance offers the tool. The bank offered project loans, trade finance, support for private companies and insurance. Indonesia pioneered green sukuk, Islamic bonds for climate projects. Pairing the bank’s money with green sukuk would bring in Gulf investors who want clean, faith-based assets.

Delivery is the next test. Six IsDB projects worth about US$1.8 billion are already running in Indonesia. Al Jasser added that the US$2.56 billion could grow if projects move well. That opens a door: if Indonesian ministries prepare strong green projects, the bank has room to fund more. The risk is familiar: slow land clearing, weak studies and shifting priorities have delayed foreign-funded projects before, and green projects need even better preparation.

Indonesia also has the power to ask. Al Jasser called it one of the bank’s most important partners, a founding member and its fifth-largest shareholder. In 2024, then Finance Minister Sri Mulyani Indrawati pressed the bank to hire more Indonesians in senior posts. The bank is now preparing a new climate action plan for the same five years. Jakarta should use its votes to shape it.

National goals point the same way. Al Jasser also met Coordinating Minister for Economic Affairs Airlangga Hartarto to discuss connectivity, health, education, food security and energy. President Prabowo Subianto wants food self-sufficiency. In a hotter climate, food security and climate safety are the same goal.

Indonesia can also give, not only borrow. Deputy Planning Minister Febrian Ruddyard argued that Indonesia can share its solutions with other developing countries. Its experience with disasters, mangroves and green sukuk is valuable to IsDB members facing the same storms and heat.

The test is simple. By 2030, what share of the US$2.56 billion went to clean energy and climate protection? Were the new ports, roads and farms built to survive floods and drought? Did Jakarta help write the bank’s climate plan, and do more Indonesians sit in the bank’s top jobs? Those answers will show whether this plan filled its missing pillar.

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The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.