UNDP Collaborates with Baznas and Financial Institutions to Achieve the Sustainable Development Goals (SDGs)Apr 20, 2017
United Nations Development Programme (UNDP) Indonesia signs agreements with the National Board of Zakat (Baznas), Bank Jambi, and Bank NTT today to support the achievements of the global goals.
“These partnerships are extremely important and projects under the agreements will demonstrate the strength of the partnerships,” said Haoliang Xu, United Nations Assistant Secretary General and Regional Director of UNDP, at the signing ceremony. “I hope they will become models that can be replicated throughout Indonesia and other countries.”
According to Baznas data, the potential amount of zakat in Indonesia is $18 billion per year. Less than 2% of that amount is collected formally, and Baznas collects around half of the share.
Baznas Chair Bambang Sudibyo expressed hopes that the partnership with UNDP and Indonesia’s financial services authority (OJK) improve zakat collection by increasing the credibility of the collecting institutions.
“I hope before 2020 zakat institutions will become sharia financial institutions that are supervised by OJK,” Mr. Sudibyo said. “This is important so the governance of Baznas and LAZ (zakat institutions) will be just like the governance of every sharia bank.”
As part of the agreement, a proposal is underway to develop a clean water facility in Nusa Tenggara using the Islamic charitable fund zakat that is collected and managed by Baznas. The agreement between UNDP and Bank NTT is the second one that builds on a first project successfully implemented to improve the life of communities in the province.
UNDP also signed a cost-sharing agreement with Bank Jambi to develop renewable energy in the form of micro hydro power plant in villages that still have no access to electricity.
“I’m delighted to sign this agreement,” said Jambi Governor Zumi Zola. “Increase in population increases the need for electricity. Unfortunately, electricity demand hasn’t been kept up by infrastructure development.”
The agreement with Bank Jambi is strongly welcome by the Ministry of Energy and Mineral Resources, which has a project targeting 15 megawatt of power generation from renewable sources, mainly solar and hydro power.