Indonesian government puts off Norway forest fund disbursement

Adianto P. Simamora, The Jakarta Post 7 Oct 10;

Indonesia has asked Norway to postpone the disbursement of millions of dollars under a climate partnership deal because Jakarta has not completed necessary preparatory steps stipulated in the deal, a minister said.

It is not clear when the decision was made but the first disbursement of US$30 million of Norway’s pledged $1 billion was expected to take place this year.

“President [Susilo Bambang Yudhoyono] suggests that we not take the money now, and wait for preparations to be improved,” Environment Minister Gusti Muhammad Hatta told reporters at a meeting on biodiversity on Wednesday.

The statement comes as Indonesian officials, led by Kuntoro Mangkusubroto, arrived home after a study tour to Brazil to learn about implementation procedures there to pave the way for the implementation of a REDD plus agreement signed by Brazil and Norway that covers areas in the Amazon rainforest.

Kuntoro, who is now chief of the Presidential Work Unit for Development and Control (UKP4), could not be reached for the comment.

Before the study tour, Indonesia and Norway delegations held a meeting on the sidelines of the UN Assembly meeting in New York to discuss which international financial institution should serve as the banker for the deal.

Norway was expected to disburse $30 million this year, another $70 million in 2011 and $100 million in 2012. The remaining $800 million is to be distributed based on carbon emissions prevented through the protection of the forest.

Meanwhile, the President’s special assistant on climate change, Agus Purnomo, denied a decision had been made to postpone receiving money from the Norwegian government.

“The taskforce on REDD [plus] will decide which financial institutions will manage the first disbursement of the $30 million from Norway on Monday,” Agus, who is also a member of the REDD taskforce, told The Jakarta Post.

“The decision will be the President’s but the selection of financial institutions — whether the UN Development Program (UNDP) or the Asian Development Bank (ADB) — will be made by the REDD taskforce.”

Indonesia has said that the $30 million installment would be used to set up independent institutions on financing, REDD plus and the MRV system. The three institutions should be established by the end of this year, according to the pact.

The President has so far only issued a decree to set up a taskforce on REDD plus that would establish institutions needed to implement the Indonesia-Norway climate partnership.

Under the agreement, Indonesia should pick one province to host a pilot project this year. Officials have repeatedly said preparations will meet all targets on schedule.

Minister Gusti said Indonesia was making good progress in its preparations to pave the way for the partnership. “The disbursement of Norway’s money might be made in 2011,” he said.