The coordination of climate finance in Indonesia

Research reports and studies
December 2014
Martha Maulidia and Aidy Halimanjaya

  • Indonesia has been through an intensive process of policy and institution building in the context of its efforts to respond to climate change. The adoption of a Mitigation Strategy (RAN GRK) and Adaptation Strategy (RANAPI) present a framework for action.
  • Key institutions in efforts to implement these measures include DNPI, the National Council on Climate Change established by the former president, the Ministry of Finance, the planning Ministry Bappenas and its Indonesian Climate Change Trust Fund, and the REDD+ Agency. Financial regulators are also beginning to encourage green investment, and there are nascent efforts to engage the private sector to make environmentally and socially beneficial investments.
  • While the ICCTF was intended to foster a coordinated approach on climate finance, in practice it is one of the smallest actors in the domestic climate finance architecture in part because of its modest levels of capitalisation, but also because the arrangements for the Fund did not give key actors other than Bappenas a clear role. The Fund has also struggled to meet international fiduciary standards.
  • Existing international climate funds have been docked in one of the key ministries involved, and have rarely made proactive efforts to engage the range of relevant national stakeholders, notably from the private sector and local government.
  • There is a recognised opportunity for new climate funds such as the GCF to work in collaboration with the NDA to take a more proactive approach to engaging diverse stakeholders, and put in place new operational processes that can foster progress in achieving mitigation and adaptation outcomes in the context of national climate and development priorities.

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