March 2018 Republic of Indonesia - Green Climate Fund
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Republic of Indonesia March 2018
CONFIDENTIALLY EDITED
DRAFT
Ver. edK0318
Indonesia's Green Climate Fund Country Programme
Fiscal Policy Agency
Ministry of Finance of Republic of Indonesia
Jakarta, March 2018
1Table of Contents
FOREWORD ....................................................................................................................................................... 5
EXECUTIVE SUMMARY .................................................................................................................................. 7
INTRODUCTION ............................................................................................................................................... 8
1.1 BACKGROUND .................................................................................................................................................................8
1.2 RATIONALE................................................................................................................................................................... 11
1.3 OBJECTIVES .................................................................................................................................................................. 11
GCF SUPPORT AND CHANGING NATIONAL CIRCUMSTANCES ....................................................... 13
1.4 MACROECONOMICS STABILITY AND FISCAL BALANCE....................................................................................... 13
1.5 THE DEVELOPMENT OF ECONOMIC AND FISCAL INSTRUMENTS ..................................................................... 13
1.6 THE DEVELOPMENT OF NATIONAL FINANCING STRATEGIES ........................................................................... 13
GREEN CLIMATE FUND COUNTRY PROGRAMME ............................................................................... 15
1.7 ROLES AND CONTRIBUTIONS OF KEY STAKEHOLDERS ...................................................................................... 15
1.8 RELEVANT POLICY DOCUMENTS ............................................................................................................................. 17
1.9 IDENTIFICATION OF GCF PRIORITIES .................................................................................................................... 19
1.10 GCF STRATEGIC IMPACT AREAS ........................................................................................................................... 19
1.11 IDENTIFICATION OF AN INITIAL LIST OF PRIORITY AREAS............................................................................. 20
1.12 SUGGESTED ACTION PLAN ..................................................................................................................................... 29
1.13 SUGGESTED MONITORING AND EVALUATION OF THE COUNTRY PROGRAMME......................................... 30
ANNEX 1: DETAILED LIST OF CONSULTED STAKEHOLDERS ......................................................... 33
ANNEX 2: INDONESIA’S POLICY AND REGULATIONS FOR THE GCF COUNTRY PROGRAMME
34
2List of Tables
Table 2.1 Target Sector in RAN-GRK ................................................................................ 8
Table 2.2 Projected BAU and emission reduction from each sector category ....................... 9
Table 3.1 Climate finance in Indonesia based on its types of source and user ................... 14
Table 4.1 List of stakeholders and their expected roles ..................................................... 15
Table 4.2 Relevant policy documents referred to by Indonesia’s GCF country programme . 17
Table 4.3 Eight GCF strategic impact areas and examples of funded activities .................. 19
Table 4.4 Matrix to assess alignment with GCF’s investment criteria ................................. 20
Table 4.5 Initial list of mitigation priority areas .................................................................. 22
Table 4.6 Initial list of national adaptation priority areas .................................................... 25
3Glossary
AEs Accredited Entities
Inpres Presidential Instruction
K/L Ministries/ Government Agencies
KKP Ministry of Marine and Fisheries
KEN National Energy Policy
MOA Ministry of Agriculture
MEMR Ministry of Energy and Mineral Resources
MOEF Ministry of Environment and Forestry
MOH Ministry of Health
MOI Ministry of Industry
MOPWH Ministry of Public Works and Housing
MOT Ministry of Transportation
MOTourism Ministry of Tourism
NDC Nationally Determined Contribution
Perpres Presidential Regulation
PP Government Regulation
PMK Ministry of Finance Regulation
RAN-API National Action Plan of Climate Change Adaptation
RAN-GRK National Action Plan of Climate Change Mitigation
RPJMN National Medium-Term Development Plan
Renstra Strategic Plan
RUEN National General Energy Plan
RUPTL National Electricity Plan
4Foreword
Green Climate Fund (GCF), an implementing entity of the United Nations Framework
Convention on Climate Change (UNFCCC) for financing mechanism, is established to
contribute to global efforts in achieving targets set by the international community to cope
with climate change. In attempt to meet this objective, GCF is mandated by the UNFCCC to
provide support and to assist developing countries in reducing Greenhouse Gas (GHG)
emissions and adapting to the impacts of climate change.
The GCF support is realized based on a country-driven approach in line with the country
ownership principle. This principle is, among others, implemented at the national level
through the establishment of National Designated Authorities (NDAs) or appointment of core
interfaces by the government, that will act as the country's focal point with GCF, and also the
preparation of the Country Programme. The NDA plays multiple roles including issuing the
No-Objection Letter (NOL), preparing the Country Programme, and nominating national
entities to gain accreditation from the GCF.
Accordingly, the Government of Indonesia has officially appointed the Fiscal Policy Agency
(i.e., Badan Kebijakan Fiskal-BKF) as the NDA in Indonesia through the Minister of Finance
Decree No. 756/KMK.010/2017 on the Assignment of Head of Fiscal Policy Agency to
Represent the Minister of Finance as the National Designated Authority to the Green Climate
Fund. With this appointment, Indonesia has taken a significant and strategic step in tapping
the GCF’s funding to support GHG emission reduction in Indonesia as described in
Indonesia's First Nationally Determined Contribution (NDC). GCF funding, as a major
international climate finance source, could potentially supplement state budget and
considerably increase the portion of funding support from international climate finance
sources. Furthermore, it is expected to leverage private sector’s investment that will key for
the achievement of Indonesia’s NDC targets.
As a follow-up to the appointment of NDA and manifestation of the country ownership
principle, the Ministry of Finance c.q. BKF has compiled a Country Programme that will
serve as the main reference for the NDA in assessing the conformity of any proposed
projects/programs with the national priorities. The national priorities outlined in this Country
Programme are summarized from the National Medium-Term Development Plan (RPJMN),
Presidential Regulation on National Action Plan for Greenhouse Gas Emission Reduction
(RAN-GRK), Indonesia’s Nationally Appropriate Mitigation Actions (NAMAs), and Indonesia’s
Nationally Determined Contribution (NDC).
The Country Programme also serves as a guideline for both nationally and internationally
accredited entities in preparing proposals for their future projects/programmes in Indonesia.
This Country Programme document is expected to assist initiators to harmonize their
project/programme's engagement and comply with the national priorities and related
legislation in Indonesia.
5This Country Programme document is prepared by the Center of Climate Finance and
Multilateral Policy (Pusat Kebijakan Pembiayaan Perubahan Iklim dan Multilateral-PKPPIM)
of BKF with the support of Gesellschaft fur Internationale Zusammenarbeit (GIZ) GmbH
through “The Study Expert Fund Support to the National Designated Authority to the Green
Climate Fund (SFF-NDA) Project” funded by The German Federal Ministry for Economic
Cooperation and Development (BMZ). The preparation of this document has involved
various stakeholders including the Ministry of National Development Planning (Bappenas),
the Ministry of Environment and Forestry, and the Ministry of Energy and Mineral Resources,
as well as private and non-governmental institutions, which accord substance and legitimacy
to the Country Programme.
We hope that with this Country Programme, Indonesia could maximize the benefits, play a
more active role and contribute to the global efforts in tackling the climate change.
Jakarta, March 2018
Minister of Finance of the Republic of Indonesia
Sri Mulyani Indrawati
6Executive Summary
Government of Indonesia has committed to reduce the national GHG emissions to 26% by
2020 and 29% post 2020 with its own effort, or 41% with international support. A concerted
effort involving national and local governments, multiple stakeholders, and financial support
are required to ensure the target accomplishment. Post the Paris Agreement, it is
acknowledged that climate finance role, both public and private, is pivotal in global effort.
Indonesia’s climate finance strategy is based on the premise of using public investment to
stimulate private finance and unlock the power of climate-friendly investment. Ministry of
Finance is the authority to manage macroeconomics stability and fiscal balance, the
development of economic and fiscal instruments, and the development of national financing
strategies; will play a paramount role in coordinating national and international source of
funding to the prioritized areas.
The Green Climate Fund (GCF) is a global fund established by the UNFCCC to support the
efforts of developing countries in responding to the challenges of climate change such as
limiting or reducing their GHG emissions and adapt to climate change. GCF is also currently
entrusted with the role of serving the Paris Agreement. GCF seeks to align its activities with
the priorities of developing countries through the principle of country ownership. This
principle is implemented through shifting responsibility over the selection and implementation
of projects and/or programmed to national level that embodied by the National Designated
Entities. Ministry of Finance as Indonesia NDA will play a key role in this GCF mechanism by
ensuring that all funding proposals submitted to the GCF secretariat are aligned with national
climate and development plans. The GCF funding is potential to support Indonesia
implementing its national priority mitigation and adaptation projects, contribute to Indonesia’s
effort to achieve an equitable and sustainable economic growth, and provide additional
resources to accelerate transitioning process to low carbon economy.
This country programme is prepared to assist accredited entities developing and aligning
their climate project funding proposals to Indonesia priority areas. This Indonesia’s GCF
country programme encapsulates a set of national development and climate change policy
as well as sectorial policy. It provides priority areas comprise of mitigation and adaptation
activities. Priority areas in mitigation consist of (1) energy generation and access, (2)
transport, (3) building cities, industries and appliances, (4) forestry sectors. Adaptation areas
include (1) health, food and water security, (2) livelihoods of people and communities, (3)
infrastructure and built environment, (4) ecosystems and ecosystem services. In light of
promoting a paradigm shift toward low emission and climate resilient development, this
country programme aims to harmonizing international climate finance and Indonesia fiscal
priority and development policies, coordinating and allocating GCF funding to areas with
financial and development gap, ensuring programmes seeking for GCF funding have
incorporated environment and social safeguards as well as inclusive engagement process.
7Introduction
1.1 Background
Indonesia is the largest archipelago country with extensive tropical rainforests sustaining
high biodiversity and carbon stock values. Indonesia high carbon rainforests hold critical
value in tackling climate change. Long coastal lines and volcanic mountains enrich its
islands with unique landscape, yet, expose them to potential natural disaster. About 90% of
natural disaster in Indonesia is in the form of Hydrometeorology phenomenon (National
Agency of Disaster Management, 2015). The risks and vulnerabilities of those occurrences
can be exacerbated by climate change impacts in the future. Therefore, Indonesia is prone
to the negative effects of climate change (First NDC Republic of Indonesia, 2016).
To reduce the negative impacts of climate change, the Government of Indonesia commits to
strengthen the nation’s regulation, financing instrument, and human resources capacity. GoI
has declared its ambition to reduce the national GHG emissions to 26% GHG by 2020 with
its own effort and 41% with international support. The reduction target is stipulated in the
Presidential Regulation Number 61 Year 2011 on National Action Plan for Green House
Gas Emission Reduction (RAN-GRK). RAN-GRK specifies GHG emission reduction targets
by sector (see Table 2.1). The RAN-GRK serves as a guideline, for the period of 2011 to
2020, for state ministries, government agencies, private sectors and communities in planning
and implementing activities to reduce GHG emissions. The local governments of 33
Provinces apply RAN-GRK as a guidance to develop regional action plan to reduce GHG
emissions (RAD-GRK).
Table 2.1 Target Sector in RAN-GRK
Sector Emission reduction target (Giga ton Core activity
CO2e)
26% 41%
Forestry and peat land 0.672 (87.6 %) 1.039 (87.4 %) Forest and land fire control, network
system management, water
management, forestry and land
rehabilitation, industrial plantation
forest, community forest, illegal
logging eradication, deforestation
prevention, community
empowerment
Agriculture 0.008 (1.0 %) 0.011 (0.9 %) Introduction of low-emission paddy
varieties, irrigation water efficiency,
organic fertilizer use
Industry 0.001 (0.1 %) 0.005 (0.4%) Energy efficiency, utilization of
renewable energy
Energy and transportation 0.038 (5.0 %) 0.056 (4.7 %) Biofuel use, engines with higher fuel
efficiency standard, improvement in
transportation demand management,
improvement of public transportation
and road, demand-side management,
energy efficiency, renewable energy
development
Waste 0.048 (6.3 %) 0.078 (6.6 %) Use of final landfill site, 3R, urban
integrated wastewater management
Total 0.767 1.189
8Source: Presidential Regulation No. 61/Year 2011 on National Action Plan of Climate Change Mitigation
The Presidential Regulation No. 71/Year 2011 about the national GHG Inventory Systems
provides the legal basis for verification of annual national and sub-national GHG inventory of
mitigation and the associated activities. For the monitoring purpose, Bappenas has
developed a system for monitoring, evaluation and reporting of mitigation actions (MER) at
both national and sub-national level in 2012.
In 2014, the Government of Indonesia announced Indonesia’s national action plan for
climate change adaptation (Rencana Aksi National – Adaptasi Perubahan Iklim, or RAN-
API). RAN-API aims to provide guidance in mainstreaming climate change adaptation into
national, local and sectoral development planning. Adaptation actions in RAN-API are
conducted to strengthening the resilience of (1) the economic system, (2) livelihood, (3)
environmental services, and (4) specific locations such as coastal areas and small islands.
RAN-API has five major clusters that consist of sub-clusters. For an instance, economic
resilience sector has several sub-clusters which one of them is food security sub-sector.
Each sub-cluster comprises more detailed adaptation options, information on the scope of
actions, priority locations, and institutions involved. RAN API has identified and discussed 15
pilot areas as the initial stride in implementing adaptation actions to climate change.
Referring to the Paris Agreement and its ratification by Law No 16/2016, GoI affirms its
climate commitment by setting the post 2020 GHG emissions reduction target from business
as usual (BAU) as much as 29% with its own effort and 41% with international support (See
table. 2.2) (INDC 2016). Under the NDC framework, Indonesia will continue its effort and
enhance achievements that have been accomplished under the RAN-GRK and the RAN-
API.
Table 2.2. Projected BAU and Emission Reduction from Each Sector Category
GHG GHG Emission Reduction
Emissi Annual
GHG Emission Level 2030
on Average Average
(MTon CO2e)
Level Growth Growth
No Sector 2010* (MTon
% of Total BaU BAU 2000 –
CO2e) (2010- 2012*
2030)
MTon
BaU CM1 CM2 CM1 CM2 CM1 CM2
CO2e
1 Energy* 453.2 1,669 1,355 1,271 314 398 11% 14% 6.7% 4.50%
2 Waste 88 296 285 270 11 26 0.38% 1% 6.3% 4.00%
93 IPPU 36 69.6 66.85 66.35 2.75 3.25 0.10% 0.11 % 3.4% 0.10%
4 Agriculture 110.5 119.66 110.39 115.86 9 4 0.32% 0.13% 0.4% 1.30%
5 Forestry** 647 714 217 64 497 650 17.2% 23% 0.5% 2.70%
TOTAL 1,334 2,869 2,034 1,787 834 1,081 29% 38% 3.9% 3.20%
Source: First NDC Indonesia, 2016
*Including fugitive ** Including peat fire
Notes:
CM1 = Counter Measure (unconditional mitigation scenario)
CM2 = Counter Measure (conditional mitigation scenario)
GoI’s strives to balance social, economic, and environmental development through
sustainable development. It is reflected in the 2015-2019 National Medium-Term
Development Plan (Rencana Pembangunan Jangka Menengah Nasional/RPJMN). The
RJPMN emphasises the importance of aligning environment aspects with the country’s
commitment to Sustainable Development Goals (SDGs). The RPJMN estimates annual total
investment increase, of IDR 3,945 trillion in 2015 to IDR 6,947 trillion in 2019, to reach an
economic growth target of 5.8% in 2015 to 8.0 % by 2019.
Realizing sustainable development, which encompass climate change, requires concerted
efforts from the national and local governments, contribution from multi-stakeholders, as well
as financial support. Adhering to national target in GHG emission reduction, Indonesia could
potentially achieve 41% reduction target with international support in form of technical
assistance and climate financing.
Post the Paris Agreement by the UNFCCC, developed country parties have agreed on
mobilizing at least 100 billion for climate actions in developing countries from 2020. It is well
acknowledged that the role of climate financing is pivotal in the implementation of the Paris
Agreement, both public and private finance. One of the international climate financing fund
can be accessed by developing countries, including Indonesia, is the Green Climate Fund
(GCF). Concluded the Paris Agreement, the GCF was given an important role in serving the
agreement and supporting the goal of keeping climate change below 2 degrees. About USD
10.3 billion fund have been pledged by developed and developing countries to assist
developing countries limit or reduce their GHG emissions and adapt to climate change
Indonesia fully supports the Green Climate Fund as an operating entity of the financial
mechanism of the UNFCCC. The GCF funding is potential to support Indonesia
implementing its national priority mitigation and adaptation projects. The GCF funding will
10contribute to Indonesia’s effort to achieve an equitable and sustainable economic growth,
also provide additional resources to accelerate transitioning process to low carbon economy.
It will add to domestic financing and promote the development of green projects.
The GCF key guiding principle is taking a country-driven approach in all of its investment
decisions (GCF, 2014c). According to the criteria IV – country ownership and institutional
capacity (ibid), significant responsibility over the selection and implementation of projects
and/or programmes is shifted to the national level. The National Designated Entities and/or
Focal Points of national governments is the official communication channel to the GCF. The
NDA will play a key role in this GCF mechanism by ensuring that all funding proposals
submitted to the GCF secretariat are in line with national climate and development plans
(GCF, 2016).
1.2 Rationale
This GCF country programme is developed to support the Indonesia NDA in delivering its
mandate. Particular objective is assuring the effectiveness of implemented mitigation and
adaptation actions where the NDA’s no-objection is in conformity with national economic,
financial, and climate policies (i.e. alignment with the country’s development priority,
adaptation needs, and mitigation’s pledge). In light of the overarching objective, NDA’s no-
objection can be a strategic instrument for:
1. Harmonising international climate finance and Indonesia’s priority on fiscal and
development policies. This includes minimising fiscal risks of foreign exchange
fluctuations through effective state loans management and disbursement time (related to
government revenues and income),
2. Concentrating and allocating GCF funding to areas with financial gap, i.e.
development areas prioritised by the Government of Indonesia with limited available
resources yet potential to support economic growth, improve income and productivity
(related to government revenues and income); less prioritised climate change thematic
areas such as adaptation or joint mitigation-adaptation projects and programmes,
3. Ensuring climate change projects and programmes seeking for GCF funding have
adequate environment social assessment and safeguards (related to national investment
priorities), and incorporate promotion of green infrastructure, gender and equitable
principles.
4. Supporting climate change projects and programmes driven by a robust and inclusive
engagement process, which brings together multiple key stakeholders -government, local
and community-based institutions, the private sector, and civil society;
1.3 Objectives
In adherence to the GCF’s initial best practice guidelines (GCF, 2014b), a support to the
NDA and its supporting function in making decision related to its no-objection, the NDA leads
11the country’s efforts to prepare country programme document. This country programme does
not intend to replace any existing climate change and development policies. It serves as a
decision making tool for the NDA and its respective stakeholders in screening project
proposals seeking for the GCF support. In principle, the country programme document is
envisioned as a living document with the following purposes:
1. To provide accountability and clarity to the accredited entities on the types of
initiatives supported by country stakeholders, including the private sector.
2. To facilitate stakeholders engagement process of existing and prospective accredited
entities in identifying project ideas, developing project proposals, finding programmes
and priorities in the development pipeline that can be supported by the GCF and aligned
with national economic development, fiscal policies and target.
3. To add value to the on-going climate change and development strategies with
strategic elements of promotion of green infrastructure, inclusiveness, gender and
equitable principles.
12GCF support and Changing National Circumstances
Changing economic environment can significantly influence the country’s effort in achieving
low emission and climate resilient development. Identifying and managing risks associated
to those changing are crucial to attain the targeted development. This section briefly
discusses areas that might affect the delivery of country programme but under the authority
of the Ministry of Finance. Therefore, the NDA as part of MoF can play substantial role in
aligning the GCF support with Indonesia’s responses to circumstances occurred under MoF
authority in managing macroeconomics stability and fiscal balance, the development of
economic and fiscal instruments, and the development of national financing strategies.
1.4 Macroeconomics stability and fiscal balance
In order to maintain the current significant progress of economic and social development,
Indonesia’s Ministry of Finance has a mandate to manage the stability of state finance from
any potential risks associated with the fluctuating elements (MOF, 2017). As a large
developing country with abundant natural resources and a green economic agenda,
Indonesia through the Ministry of Finance has set and been implementing a green planning
and budgeting strategy to promote environmental sustainability while managing the state
budget in changing economic circumstances (MOF, 2015).
The Ministry of Finance executes its significant role in managing the state budget through
implementation of several fiscal policy instruments such as decisions to issue state loans,
taxation, and the reallocation of resources to overcome some fiscal gaps (MOF, 2017). In
respect to that, the Ministry of Finance need to manage GCF resources in Indonesia -in the
forms of loans and other financial modalities- to reach a fiscal balance that in line with the
direction of Indonesia’s fiscal policies and low carbon development in a concerted manner.
1.5 The development of economic and fiscal instruments
The Ministry of Finance is entrusted with primary responsibility of developing and managing
robust economic and fiscal instruments (MOF, 2017). Despite possible different (positive and
negative) effects of instruments toward fiscal balance, including the Government
Regulation/PP Number 44 Year 2017 on environmental economics instruments, they likely
accelerate Indonesia’s progress in achieving its economic development and climate change
targets in various sectors. Particularly, if it is supported by concerted GCF supports.
1.6 The development of national financing strategies
Indonesia’s green economic agenda and climate change activities require a significant
amount of investments in physical infrastructure, human and technological capacity
development. It also requires the deployment of appropriate technologies across various
sectors namely energy, agriculture forestry and land use (AFOLU), agriculture, waste and
Industrial processing and product use (IPPU) (Republic of Indonesia, 2015, 2016). The
Ministry of Finance is responsible in developing strong national financing strategies and
synchronizing the GCF supports with them. Hence, the Ministry of Finance would be able to
13direct the GCF funding to address the investment needs and support Indonesia’s effort in
meeting climate change targets.
Indonesia is still in the early phase of formulating effective use of public finance and strategy.
Numerous efforts have been carried out to find effective finance instruments to respond the
climate change issue. Effective finance instruments are expected to meet following
purposes: (1) filling the financing gap where there is minimum or none investment from the
private sector (i.e. initial stage of energy exploration, the development of certain
technologies, and the business development of sustainable non-timber forestry products
which are considered risky and not profitable); (2) being a catalyst of policy change and
leveraging private finance through public private people partnership; (3) being a regulatory
tool, through the use of financial schemes such as carbon tax, to promote a behavioural
change of individuals and companies to shift its activities toward low generation of carbon
emissions.
The Ministry of Finance classifies climate finance in Indonesia into several categories
according to its source and the users (Table 3.1). This classification is used in development
of national financial strategies for climate. The category in grey colour have the potentials to
leverage climate finance through sourcing from the private sector and financial market.
Table 3.1 Climate Finance in Indonesia Based on Its Types of Source and User
Source of finance/ Indonesia’s Foreign government Private Financial
government budget budget company market and
Users of finance
bourse
Indonesia Domestic public International public Corporate Corporate social
government and climate finance climate finance social responsibility
civil societies through fiscal policy through ODA and responsibility
OOF and direct
transfers
Private company Incentives through Incentives such as Private Dividend
fiscal policy such as guarantees, equity investment
guarantees fund
Financial market Incentives through Incentives such as Dividend Market
and bourse fiscal policy such as equity fund mechanism
equity fund
Source; Indonesia’s Ministry of Finance
14Green Climate Fund Country Programme
The GCF country programme is developed with a hope that climate change efforts in
Indonesia are supported with country ownership, aligns with national policies and prepared
to contribute to the GCF objectives and goals. To achieve this, Indonesia’s Ministry of
Finance engages key stakeholders across government institutions, local and community
representative groups, the private sector, and civil society organisations in developing this
country programme. The country programme also includes the list of relevant policy
documents and the proposed criteria that are adopted from the GCF investment framework.
1.7 Roles and contributions of key stakeholders
A large number of key stakeholders will have a significant contribution in the implementation
of mitigation and adaptation activities in Indonesia. The initial lists of key stakeholders and
their diverse potential role have been prepared to support the NDA in conducting
consultation for the development and the implementation of this country programme (see
Table 4.1). Some relevant stakeholders as listed in Annex 1 have been engaged in the early
phase of this country programme development through multi-stakeholder meeting and a
series of bilateral meetings.
Table 4.1 List of Stakeholders and Their Expected Roles
Actors Potential Roles Stakeholders
Line Ministries Facilitate discussions GCF NDA:
and issue no-objection Ministry of Finance, BKF/PKPPIM
letter and NIE
accreditation support
based on inputs from
technical ministries and
wider stakeholders
Provide enabling Key ministry stakeholders:
environment for priority 1. Ministry of Environment and Forestry
actions 2. Ministry of Finance
Provide technical input 3. Ministry of National Development Planning (BAPPENAS)
and advice for the NDA Key technical ministries:
to make decisions on Ministry of Agriculture
NOL Ministry of Cooperatives and SMEs
Provide advice to Ministry of Economic Affairs
project proponents and Ministry of Energy and Mineral Resources
act as Executing Ministry of Fisheries and Maritime
Entities Ministry of Industry
Ministry of Public Works and Housing
Ministry of Rural Development and Transmigration Ministry
of Tourism
Ministry of Transportation
Additional technical ministries:
Ministry of Agrarian and Spatial Planning
Ministry of Foreign Affairs
Ministry of Health
Ministry of Home Affairs
Ministry of Social Work
Ministry of Trade
15Actors Potential Roles Stakeholders
Ministry of Women's Empowerment and Child Protection
(candidate) Develop project PT SMI (accredited), PT IIF, Kemitraan (in the pipeline for
GCF National proposals and channel being accredited), etc.
AEs the GCF funding to
GCF projects e.g. AFD, ADB, CI, Crédit Agricole Bank, Deutsche Bank,
International Act as Executing EIB, IFC, IUCN, KfW, UNDP, UNEP, World Bank, WFP, WMO,
AEs Entities for projects etc.
Provide support and FAO, FMO, IFAD, KEXIM, GIZ, etc.
advice to support
Sub National Provide Advice to BAPPEDA, Sub National government Provincial offices,
Government project proponents and subnational government offices
act as Executing Bodies
for GCF funded projects
Civil Society Provide Advice to Local Community: e.g. Aliansi petani Indonesia, serikat
and Community- project proponents and nelayan nusantara, Masyarakat Peduli energi dan
Based act as Executing Bodies lingkungan, etc.
Organisations for GCF funded projects National NGO: e.g. Belantara Foundation, IESR, Kemitraan,
ICW, TI, Forest Watch Indonesia, ICEL, AMAN, ICEL, Koalisi
Pemuda Hijau Indonesia, Seknas Fitra, Kehati, Pelangi, YPB,
Kemitraan, etc.
International NGO: e.g. Greenpeace, WWF, TNC, FFI, TAF,
ZSL, Tropenbos International
Local NGO: e.g. Walhi, Huma, Jari, Bumi Jatam, epistema,
Prakarsa Borneo
International Involve in donor UNFCCC financial mechanisms: e.g. Adaptation Fund, GCF,
Organizations coordination meeting GEF;
and Provide co-financing Other multilateral mechanisms: e.g. CIFs, GCCA, PPCR,
Development support REDD+ mechanisms, SREP, etc.
Partners Bilateral Donors: e.g. Australia, EU, Germany, Japan,
Norway, UK, USA, etc.
National Provide technical Research centres e.g. CIFOR, LP3I, SDG centre, CPI, LPPM
consultants and assistance when ITB - Pusat Perubahan Iklim, LPPM ITB - Pusat Kebijakan
project needed by AE and NDA Keenergian, UI - Pusat Riset Perubahan Iklim, UGM - Pusat
developers, incl. Studi Energi, Surya University, Swiss German University,
national IPB – KSKP
research
centres
Private Sector/ Act as Executing Energy generation and access: e.g. Masyarakat Energi
Business Bodies for projects and Terbarukan Indonesia, Asosiasi Pengelenggara
associations programmes Pembangunan Listrik Tenaga Air. Transport: e.g. Asosiasi
Act as project Penumpang Kereta Api, Asosiasi Logistik Indonesia.
proponents Forestry and land use: e.g. Asosiasi Pengusaha Hutan
Indonesia, Gabungan Perusahaan Perkebunan Indonesia,
Gabungan Pengusaha Kelapa Sawit Indonesia, Asosiasi
Panel Kayu Indonesia, Indonesian Pulp and paper
Association. Buildings, cities, industries, and appliances:
e.g. Apkenindo, Asosiasi Kontraktor Indonesia, Green
Building Council Indonesia, Building and Construction
Authority. Livelihoods of people and communities: e.g.
Aliansi Masyarakat Pesisir dan Kepulauan, Aliansi
Masyarakat Untuk Keadilan, Koalisi Perempuan Indonesia
Health, food and water security: e.g. Ikatan Dokter
Indonesia, Perhimpunan Dokter Kedokteran Komunitas dan
Kesehatan, Persatuan Perusahaan Air Minum Indonesia.
Ecosystems and ecosystem services: e.g. Asosiasi
Pariwisata Alam Indonesia
16Actors Potential Roles Stakeholders
Media (observer Observe and inform News TV channel: e.g. Metro TV, TVOne, CNN Indonesia
only) public regarding NDA Printed media (national level): e.g. Kompas, Media
and AE activities Indonesia
Printed media (provincial level): e.g. Jawa Pos, Bali Pos,
Kalteng Pos, Tribun Kaltim, Sumut Pos, Papua Pos, Tribun
Timur
Online: e.g. detik.com
Source: CDKN technical recommendation for Indonesia’s NDA on stakeholder’s consultation; All non-state actors above are
non-exhaustive lists of stakeholders.
1.8 Relevant policy documents
This Indonesia’s GCF country programme refers to a set of national development and
climate change policy documents as well as sectorial policy documents (see Table 4.2). The
country programme extracts the target from these documents and clusters them into GCF
Results Areas. 1
Table 4.2 Relevant Policy Documents Referred to by Indonesia’s
GCF Country Programme
Policy Explanation Alignment with GCF result area(s) in GCF
document country programme
Book I, II, III Priorities of development activities All result areas
RPJMN 2015- in detail
19
RAN-GRK Presidential Regulation Number 61 All result areas for climate change
on The National Action Plan for mitigation: energy generation and access;
Greenhouse Gas Emission transport; forestry and land use; buildings,
Reduction which cover climate cities, industries, and appliances
change mitigation action plan until
2020 including targets and
activities
RAN-API National Action Plan for Climate All result areas for climate change
Change Adaptation is a policy adaptation: health, food and water security;
document that lists and tracks all infrastructure and built environment;
activities with adaptation benefits livelihoods of people and communities; and
funded by the national government ecosystems and ecosystem services
budget until 2020
NDC Indonesia’s National Determined All result areas
Contribution covering climate
change targets, result areas and
activities after 2020
KEN Government Regulation Number 79 Energy generation and access
Year 2014 on National Energy
Policy
1 Working areas of the NDC are going to be relevant for the Country Programme update for post 2020 following the release of
the RPJMN 2019-2024.
17RUEN Presidential Decision Number 1 Energy generation and access
Year 2014 on the Guidance for
National General Energy Plan
(Pedoman RUEN)
RUPTL 2016-2025 National Electricity Plan Energy generation and access
RUPTL
PP 3/2016 Presidential Regulation Number 3 Infrastructure and built environment
Year 2016 on acceleration of
infrastructure
PP 122/2015 Presidential Regulation Number Health, food and water security
122 Year 2015 on drinking water
system
PP 17/2015 Presidential Regulation Number 17 Health, food and water security
Year 2015 on food security
Perpres 1/2016 Presidential Regulation on National Forestry and land use (mitigation);
Peatland Restoration Agency ecosystems and ecosystem services
Inpres 10/2011; Presidential Regulation on (adaptation)
Inpres 8/2015 moratorium of forest and peat land
licenses
Perpres 4/2016 Presidential Regulation Number 4 Energy generation and access
Year 2016 on the Acceleration of
Electricity Infrastructure
Renstra MEMR Ministry of Energy and Mineral Energy generation and access
Resources (MEMR)’ 2015-2019
Strategic Plan
Renstra MOI The Ministry of Industry’s 2015- Buildings, cities, industries, and appliances
2019 Strategic Plan
Renstra MOT The Ministry of Transportation’s Transport
2015-2019 Strategic Plan
Renstra The Ministry of Public Works and Buildings, cities, industries, and appliances
MOPWH Housing’s 2015-2019 Strategic Plan
(for buildings and cities)
Renstra MOEF Ministry of Environment and Forestry and land use; livelihoods of
Forestry’s 2015-2019 Strategic Plan people and communities; ecosystems and
ecosystem services
Renstra MOA Ministry of Agriculture’s 2015-2019 Forestry and land use (mitigation); health,
Strategic Plan food and water security (adaptation)
Renstra MOH Ministry of Health’s 2015-2019 Health, food and water security
Strategic Plan
Renstra KKP The Ministry of Marine and Health, food and water security;
Fisheries’ 2015-2019 Strategic Plan infrastructure and built environment;
livelihoods of people and communities
Renstra Ministry of Tourism’s 2015-2019 Livelihoods of people and communities;
MOTourism Strategic Plan (eco-tourism) ecosystems and ecosystem services
181.9 Identification of GCF priorities
This section facilitates the NDA and stakeholders in the identification of priority areas for
engagement with the GCF. Building on existing national policies, strategies, and plans, it
presents an initial list of priority areas that can be further refined in subsequent stages based
on stakeholder’s engagement. Identified priority areas will assist the NDA and respective
stakeholders to issue a no-objection letter 2 as a way to confirm that projects are in
conformity with country’s national priorities, strategies and plans.
1.10 GCF strategic impact areas
The GCF provides support for activities under mitigation and adaptation result areas 3 .
Forthcoming projects are expected are to fall under one or more of the mentioned results
areas. Impact Areas and corresponding examples are described in the Table 4.3.
Table 4.3 Eight GCF Strategic Impact Areas and Examples of Funded Activities
Impact areas Example funded projects
Mitigation strategic impacts
Energy generation and The development of all renewable energy sources such as wind, solar,
access geothermal, waste and others and their transmission to the end users.
Transport The development of public transport systems, infrastructure and
connectivity such as railways, MRT/LRT/bus/bicycle corridors and
pedestrian facility.
Buildings, cities, The development of green buildings, waste water recycling system for cities
industries and appliances across Indonesia, and all energy efficiency programs for households as well
as energy intensive industries such as cement, pulp and paper, steel,
textile, and fertilizers.
Forestry and land use The development of sustainable forests and peat land management which is
expected to reduce the rate of deforestation and forest degradation.
Activities under this management includes the sustainable management of
forests and peat lands by communities including cooperatives, regional
development banks (Bank Perkreditan Desa/Rakyat), the management by
the government such as the development of Forest Management Units
(known as Kesatuan Pengelola Hutan (KPH)) and the management by
concession holders such as agro forestry companies, drinking water
companies, mining companies and all other companies located in and/or
share working areas with forest and peat land boundaries.
Impact areas Example funded projects
Adaptation impact areas
Health, food and water The development of systems that support for vulnerable communities
2 By issuing the no-objection letter the NDA confirms that the submitted funding proposal is in conformity with (a) the country’s
national priorities, strategies, and plans; (b) relevant national laws and regulations (c) an in accordance with the Fund’s
environmental and social safeguards. See GCF/B.08/45 for further details.
3 Result areas are outlined in GCF/B.08/07 available at:http://www.greenclimate.fund/documents/20182/24946/GCF_B.08_07_-
_Further_Development_of_the_Initial_Results_Management_Framework.pdf/7c362a8f-7b1e-4519-9bf2-
04aa93806c97?version=1.1
19security such as farmers and fishermen who are affected by the negative impacts
of climate change to cope with climate related hazards that affect crop
yields and catchment. The supports can be in many forms such as equip
vulnerable communities with early warning systems, educate them with
crop resilience techniques, sustainable farming techniques which reduce
GHG emissions, i.e. low use of fertilizers sustainable fisheries which
protect mangroves and coral reefs.
Infrastructure and built The development of resilience infrastructure and coastal management as
environment well as all vulnerable locations across Indonesia which are detected
through an assessment.
Livelihoods of people and The development of livelihood and socio-economic activities of people
communities who are negatively affected by climate change impacts. An assessment of
territorial vulnerability from climate change impacts can be used to
identify which communities are likely to be affected by the impacts.
Ecosystems and ecosystem The development of ecosystems that are prone to climate change
services impacts. This includes the development of environmentally friendly
services that are economically viable for communities, businesses, and
the ecosystems themselves.
1.11 Identification of an initial list of priority areas
The priority areas for engagement with the GCF presented in this section build on and reflect
Indonesia’s climate policy and development priorities, as embodied in Indonesia’s key
development, climate change related policy documents which includes Indonesia’s 2015-19
long term development policy (RPJMN 2015-19), national action plan of climate change
mitigation (RAN-GRK) and adaptation (RAN-API) organized by the Ministry of Development
Planning (BAPPENAS), Indonesia’s NDC submitted by the Ministry of Environment and
Forestry (KLHK), financial policies regulated by the Ministry of Finance and ministries’
strategic plan (RENSTRA K/L) (see Annex 4). The NDC has been submitted to UNFCCC
and will serve as the continuation of the RAN-GRK and RAN-API for post-2020 agenda.
Tables 4.5 and 4.6 provide a summary of an initial list of priority areas or opportunities for
the GCF, on mitigation and adaptation, for each of the GCF result areas. Priority areas
described below are not expected to represent single projects and/or programmes, but
rather reflect priority areas that benefit from strong government ownership and to which
future projects or programmes would have to comply to.
In parallel to the development of the Country Programme, the NDA consulted sector
ministries as well as (potential) international and national accredited entities on potential
projects for which GCF funding is sought for in the near future. Annex 1 presents an initial
list of 33 GCF project proposals, which are at various stage of development. Identified GCF
project proposals are not expected to be representative as not all key actors could be
consulted nor should projects listed in the Annex be considered as a priority. Rather the
objective is to present an overview of the range and scale of projects for which GCF funding
is sought. The NDA may discuss the list of criteria in Table 4.4 below and use the criteria
against the project pipelines as part of no-objection procedures (see CDKN output 7-10).
Table 4.4 Matrix to Assess Alignment with GCF’s Investment Criteria
High (H) Low (L)
20High (H) Low (L)
Significant reduction or avoidance Low potential for reduction or
of Indonesia’s GHG emissions at avoidance of Indonesia’s GHG
relatively low cost per ton emissions, or relatively high cost per
mitigated. ton mitigated.
Impact Potential
Significant potential to address the Low potential to address the need of
need of vulnerable people, vulnerable people, communities and
communities and regions in regions in Indonesia and enhance their
Indonesia and enhance their resilience.
resilience.
Clear demonstration of medium to Low potential to drive a medium to long
long term significant term transformation, due to the low
transformation - sustained by potential for replication of
projects/programs being scaled up projects/programs or low probability of
and replicated or practices being wide adoption of practices, thereby not
widely adopted – that contribute to contributing to the creation of an
the creation of an enabling enabling environment (i.e. achieving
environment (i.e. achieving system system change) and to Indonesia’s
Paradigm Shift
change) and to Indonesia’s sustainable development, including
and sustainable
sustainable development, including social, economic (promote
Development
social, economic (promote employment) and environmental co-
Potential
employment) and environmental benefits for a paradigm shift and not
co-benefits for a paradigm shift promoting a shift away from emission-
and lead to a significant shift away intensive infrastructure and practices
from emission-intensive and/or the establishment of a climate
infrastructure and practices and/or resilient economy. No gender-sensitive
that establish a climate resilient component.
economy. Gender-sensitivity
considered.
Exhibit a strong case of a financial Exhibit a weak case of a financial gap
gap that is difficult to be funded that project requires support from the
Needs of GCF
neither by Indonesia’s national and GCF, i.e. projects/programs have been
funding
regional government budget fully funded by national and regional
(APBN, APBD) nor by other government budget (APBN, APBD) and
sources. by other sources
Strong alignment with government Lack of alignment of the action and/or
strategies and priorities such as conflicting with government strategies
with programs/projects/activities and priorities such as with
suggested in RAN-GRK, RAN-API, programs/projects/activities suggested
Country NDC and other climate related in RAN-GRK, RAN-API, NDC and other
Ownership programs stated in RPJMN and climate related programs stated in
other existing policies and RPJMN and other existing policies and
regulations. High potential to regulations. Low potential to promote
promote ownership amongst local ownership amongst local populations.
populations.
Financially sound project with Questionable financial structure, i.e.
good fiduciary standards and weak fiduciary standards and/or low
Efficiency and
adoption of best practices, with possibility of securing co-financing.
Effectiveness
high possibility of securing co-
financing.
High potential for project/program Low potential for project/program to
to address financial barriers, address financial barriers, inability to
Financial viability generate revenue for its generate revenue for its
and sustainability/continuation after the sustainability/continuation after the
sustainability GCF support ends without GCF support ends and lack of financial
disrupting fiscal balance and plan to avoid disrupting fiscal balance
exchange rates. and exchange rates.
21Table 4.5 Initial List of National Mitigation Priority Areas
Green Climate Fund Result Areas
Mitigation
Energy generation and Transport 1 Buildings, cities, industries, Forests and land use
access and appliances
Develop and implement Improve (low carbon) Buildings: Forests and peat land: Other land use:
green energy that is transportation connectivity Improve access to proper, safe Develop and implement forest Promote post-mining
efficient and between major and remote and affordable (green) housing planning which reclamation and
environmentally friendly in areas including surrounding including in transmigration accommodates the environmental remediation
cities and increase energy regents and districts using in areas enhancement of global carbon efforts post-mining
security in remote areas, land, sea, river, air transport Improve quality of sink, the improvement of the activities
especially at Indonesia’s systems, and renovation of old infrastructure (measurement, people's access to resources Improve the capacity of
borders and other ports and airports in priority standardization such as green protected areas to improve government and
underdeveloped areas (see areas such as in 10 new buildings, testing, and quality) their social welfare / income strengthen cross-sectoral
Table 8.2 and 8.13 Book II industrial areas (KEK), 13 Cities: generation while preserving coordination among
RPJMN 2015-19) by KAPET, 4 KPBPB, and169 KPI Develop and implement cities’ protected forest, forest fire agency, policy makers and
improving the role of (see Book II RPJMN 2015-19 green open space, green waste control, investigation and land users at the national
renewable energy in energy Figure 8.3 and Table 8.2, 8.10- management including protection and local levels who have
mix, such as the utilization 13). constructing final treatment Establish, develop and role in spatial planning to
of water resources (micro- Develop and implement green facility (FTF) and maintenance implement forest management develop, monitor and
hydro, mini-hydro), transportation in cities while of an integrated waste unit and social forestry enforce high quality spatial
agricultural waste and put attention on interaction management through reduce, programme to facilitate the planning and refer to
manure (biomass), solar, between transport and land reuse, recycle) and develop on- designation of community Strategic environmental
wind for power generation, use, i.e. Intelligent Transport and off-site systems of waste forest/village forest assessment to ensure the
capacity based lake (e.g. System (ITS) such as construct water facilities and management work area and land distribution across
Toba, Mantano, Sentarum) airport railway track and infrastructure such as in business partnership and villages and the land rights
management for energy monorail in Jakarta, improve priority areas for city improve the production and for farmers, land workers
generation, energy access the capacity and quality of city development in 5 National productivity of forest and fishermen to utilize
(pipe connectivity) road network, install converter Strategic Areas (KSN), 20 resources (timber and non- and manage natural
1
Reduce the level of emissions in accordance with the National Action Plan to reduce Greenhouse Gas Emissions (RAN-GRK) in the transport and energy sectors amounted to 4.95 per cent with
their own efforts, or 9.66 per cent plus foreign aid from BAU by 2020.
22Energy generation and Transport 1 Buildings, cities, industries, Forests and land use
access and appliances
Develop geothermal power kit (public transport gasification autonomous cities outside Java timber) such as through resources such as in
plants including the to use natural gas as city public in KTI 2, improve 7 existing developing timber and non- transmigration area
monitoring of its use for transportation fuel), build non- KSN 3 and transmigration timber forest products Develop enabling
various sectors by motorized transports locations processing industry aimed at environment for forest land
strengthening the role and (pedestrian and bicycle lines), Industries: increasing the added value of use project and programs:
quality of Regulatory apply Traffic Impact Control Develop guideline for the use of the forestry sector improve law enforcement
Technical Support (TIC), parking management, biomass and other Increasing the effectiveness instruments through: (i)
Organization and build its congestion charging and road technologies in cement and quality of forest develop one map with
enabling environment such pricing (combined with mass industry management: (i) FMU acceptable accuracy at
as improve the mechanism rapid transport) Develop marine industry, development for the entire local level as the basis of
of fossil fuel subsidy and Develop, reform, rejuvenate including sustainable fisheries, forest area; (Ii) increase law enforcement; (ii)
gradually phasing out the mass public transport and sustainable marine tourism, community involvement in accelerate the settlement
subsidy, mitigate land transport fleets, i.e. bus (BRT) and sustainable maritime forest protection through boundary and
conflict for renewable and LRT, tramway, MRT such industry partnerships (iii) strengthen strengthening of forest
energy provision and as develop city railways, Improve technical efficiency the capacity of managers of area, among others,
develop capacity for the procure new electric rail way through the revitalization of forest conservation at the site carrying out a joint
implementation of train (KRL), modify diesel rail industrial machinery (less level to protect, improve the regulation between the
renewable energy and its train (KDR) into electric diesel emissions, higher productivity) quality of habitat, preserve Ministry of Environment
distribution including rail train (KRDE), and work force’s skill species and genetic resources and Forestry, Ministry of
research on related to Improve the capacity of improvement while improving Improve forest governance Home Affairs, Public Works
activities mentioned above transportation institutions and industrial population: 9000 new (good forest governance) and BPN on Settlement of
Implement energy management such as the large and medium scale including accelerate the Land Tenure in the Forest;
conservation partnership acceleration of the industries with 50% outside certainty of the legal status of (iii) Increase the quantity
programme by development of Jabodetabek Java and 20,000 small scale forests, increasing the and quality of human
strengthening the efficiency Transportation Authority (OTJ), industries and industrial transparency of data and resources supervisors and
of energy supply and conduct socialization on smart development in 13 priority information of forest law enforcement agencies
demand, such as apply (eco) driving training, locations 4 especially outside resources, and improve the (recruitment, transfer,
energy management for management for lake based Java Island and 22 small and quality of governance at the capacity building,
2 Sulawesi, Kalimantan, Maluku, Nusa Tenggara and Papua
3 Papua region, Maluku region, Nusa Tenggara region, Region Sulawesi, Kalimantan Region, Region of Java-Bali and Sumatera.
4 (1) Bintuni – West Papua; (2) Buli - East Halmahera - North Maluku; (3) Bitung – North Sulawesi, (4) Palu – Centre Sulawesi; (5) Morowali - Centre Sulawesi; (6) Konawe – South East Sulawesi;
(7) Bantaeng – South Sulawesi; (8) Batulicin – South Kalimantan; (9) Ketapang – West Kalimantan; (10 Landak – West Kalimantan, (11) Kuala Tanjung, North Sumatera, (12) Sei Mangke – North
Sumatera; dan (13) Tanggamus, Lampung.
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