The tension between mass tourism development and ecological preservation represents the critical challenge facing Bali’s economic future. While the island remains Indonesia’s premier destination, the rapid expansion of tourism infrastructure has precipitated severe environmental degradation, necessitating an urgent transition toward sustainable development models. This paper investigates the financial viability of utilizing Green Bonds as a primary mechanism to fund sustainable tourism infrastructure in Bali. Adopting a mixed-methods approach, this study analyzes financial market data, regulatory frameworks, and qualitative feedback from key stakeholders, including local developers and financial institutions. The research identifies a significant financing gap where traditional bank lending often fails to accommodate the long- term ROI profiles of green projects. The findings suggest that while there is high theoretical potential for Green Bonds to bridge this gap—bolstered by strong investor appetite for ESG- compliant assets—the practical application in Bali is currently hindered by high transaction costs, a lack of standardized verification mechanisms, and the fragmentation of local tourism operators. Ultimately, the study argues that for Green Bonds to be a viable solution for Bali, a localized aggregation framework and clearer fiscal incentives are required to align global capital with local ecological preservation.
Keywords: Green Bonds, Sustainable Tourism, Tourism Infrastructure Finance, ESG Investing, Island Economies, Sub-National Finance, Aggregation Mechanisms, Bali, Tri Hita Karana