More than US$800mil donations in pipeline for Indonesia Environment Fund


Greenpeace activists wear penguin costumes and hold signs reading 'Iklim berubah, ekosistem laut terancam' (Climate is changing, the ocean ecosystem is threatened) during a protest in Jakarta on Feb 9, 2020. - JP

JAKARTA (The Jakarta Post/ANN): Indonesia is in talks to secure US$836 million in green funds to finance environmental protection and climate change mitigation efforts in one of the world’s top greenhouse gas-emitting countries.

The Indonesia Environment Fund (IEF), a government agency, told reporters on Thursday (May 27) that at least six donors had either agreed to or were discussing the funding plan to finance green projects running between 2021 and 2030.

“Each scheme will have its own specific targets. We will oversee the beneficiary, as requested by the fund holders, ” IEF agency head Djoko Hendratto told reporters in an online press conference hosted by the Finance Ministry on Thursday.

The fund is deemed necessary to help Indonesia meet its commitment to reducing emissions by at least 29 percent on its own or up to 41 per cent with international support by 2030, as per the country’s nationally determined contribution (NDC) to the landmark 2015 Paris Agreement on climate change.

The Environment and Forestry Ministry, according to its Second Biennial Update Report, estimates that Indonesia will require at least $247 billion over the period of 2018 to 2030 to implement the NDC.

The government has not allocated enough state funding to meet the requirement, leaving an estimated 60-70 per cent annual funding gap.

“Those [climate mitigation efforts] require a lot of funding, and it cannot come from the government alone, ” Nadia Hadad, strategic engagement director at Madani Berkelanjutan, a nonprofit organisation focusing on forest and land management, told The Jakarta Post on Friday.

She said the IEF was helping to spur funding by enabling donors to avoid state budgeting bureaucracy but added that the agency’s opaqueness over its decision-making process and its lack of indigenous groups and civil society representation deterred investment.

Of the total funds listed by the IEF, the largest amount comes from the Norwegian government through the bilateral REDD+ scheme with a total of $560 million within the period of 2021 to 2030.

Norway will disburse $56 million in the first year of the agreement, while the rest will be paid out in several stages each time Indonesia meets certain requirements outlined in the deal.

“This payment agreement is still in discussion. Depending on the negotiations, it may be started this year or not, ” IEF director of fund collection and development Endah Tri Kurniawati told reporters at the same press conference on Thursday.

The World Bank’s International Bank for Reconstruction and Development (IBRD) provided an additional $110 million through its Forest Carbon Partnership Facility (FCPF) scheme.

The deal signed on Nov 27,2020, is devoted to projects in East Kalimantan. Based on the agreement, the funds will be disbursed in three stages starting with $25 million in 2021, $40 million in 2023 and $45 million in 2025 with emission reduction targets of 5 million, 8 million and 9 million tons of carbon dioxide in the three stages.

The IEF is also in the process of securing $103 million from the UN’s Green Climate Fund (GCF), $60 million from the BioCarbon Fund devoted to Jambi province, $2 million from the World Bank to improve IEF external-internal capacity building and $1 million from the Ford Foundation. REDD+, the Norwegian embassy and World Bank did not immediately respond to The Jakarta Post’s requests for comment regarding the agreement mentioned by the IEF. - The Jakarta Post/Asia News Network

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