Indonesia: Govt mulls establishment of new body to manage climate funds

Hans Nicholas Jong, The Jakarta Post 22 Dec 15;

As pledges to help Indonesia tackle climate change pour in, the government is mulling over several options to compile and manage the funds.

Currently being considered are several options, including establishing a new permanent agency in place of the existing Indonesian Climate Change Trust Fund (ICCTF), an ad hoc body that manages climate funding for Indonesia.

The National Development Planning Board (Bappenas) said on Monday that the government had not decided whether the current climate funding mechanism, under the ICCTF, would be continued or not.

The ICCTF pools and coordinates funds from various sources to support and finance climate change programs and policies. The ICCTF is one of only two nationally managed trust funds in the world dedicated to fighting climate change, making it a model for many middle-income and developing countries.

“There’s no certainty at the moment,” Bappenas weather and climate deputy director Syamsidar Thamrin told reporters at the ICCTF office in South Jakarta.

In the wake of prolonged forest fires this year and a global pledge in Paris to cut emmissions, the US, Australia and the European Union have disclosed plans and funding to help Indonesia with its climate change efforts.

Last month, Environment and Forestry Minister Siti Nurbaya Bakar said that the ministry was discussing several options for climate change funding with Bappenas and the Finance Ministry.

She added that the current funding mechanism was still too complicated as the implementation on the field was hampered by Finance Ministry regulations.

Climate Change Mitigation Board chairman Sarwono Kusumaatmadja recently said that the government, through the Finance Ministry, was planning on establishing a management body (BLU) to manage the country’s climate change funding.

According to Sarwono, the establishment of a separate institution was needed, despite the country already having the ICCTF, in order to accommodate the diverse types of financing needed to address climate change, both in terms of funding targets and sources.

While Siti previously said that the government might strengthen the ICCTF instead of establishing a new body, she said on Monday that there had been a push for change.

“There has been agreement among ministers that the climate change funding mechanism should be put directly under the Finance Ministry [instead of the current mechanism under Bappenas],” she said.

Siti added that the deliberation on the future of Indonesia’s climate change funding mechanism should be completed as soon as possible as the country needed funding assistance if it wanted to achieve its target of reducing emissions by 29 percent by 2030 as well as increasing renewable energy sources to 23 percent by 2025. Currently, renewable energy makes up 3.64 percent of Indonesia’s total energy portfolio.

Syamsidar said that it was better for the government to strengthen the ICCTF than establish another body.

“The ICCTF has been running for a long time and has experience in the field. Meanwhile, the other [option] is just about to be established. In our experience, a new institution will take time to be fully operational. Rather than waiting for a new institution, which is still uncertain, the ICCTF should be strengthened so that the immediate needs in 2016 can be met,” she said.

Syamsidar also pointed out how the ICCTF had succeeded in gaining trust from international donors, such as the US Agency for International Development (USAID), the UK Climate Change Unit (UKCCU) and the Danish International Development Agency (Danida).

“The ICCTF currently receives US$11 million from those three agencies. The fund will be used for our operations starting in 2016,” she said.

About $5 million of those funds come from USAID. Syamsidar said that Indonesia should have been able to pool more funding if only it had more people capable of making quality project proposals.

“We are still lacking in terms of drafting good proposals. We have the potential but when we want to pitch [for climate change projects], we have to be believable in our presentation,” she said.

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