Strategic partnership for supported NAMAs and climate finance – support for the ICCTF
Title: Strategic partnership for supported NAMAs and climate finance – support for the ICCTF
Commissioned by: German Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB)
Lead executing agency: Indonesian Ministry of National Development Planning (BAPPENAS)
Overall term: 2013 bis 2017
A presidential decree in late 2011 saw Indonesia commit to a National Action Plan for Reducing Greenhouse Gas Emissions, which involves using national resources to cut emissions by 26 per cent and international resources to achieve a further 15 per cent reduction by 2020. Corresponding action plans have been drawn up for the development and implementation of the climate strategy by local authorities.
Indonesia is one of the world’s first nations to set up a national climate fund, namely the Indonesia Climate Change Trust Fund (ICCTF), which aims to ensure that international funding is effectively pooled and coordinated for the purpose of financing the country’s climate policy. Prior to the appointment of a national trustee, the fund was managed by the United Nations Development Programme (UNDP). The United Kingdom, Australia and Sweden contributed some USD 11 million to the fund during the pilot phase (2009-2014). A number of initial projects have been implemented successfully in cooperation with Indonesian ministries and non-governmental organisations.
The ICCTF is being considered as a potential national implementing entity for the United Nations’ Green Climate Fund (GCF), a role which would see it receive finance from the GCF to channel into selected climate projects.
While some positive results have already been achieved, it is necessary to further develop the fund’s structural capacity. This involves building skills and increasing resources. With its new structure, managed by the Indonesian Government, the ICCTF must operate within Indonesia’s legal framework for public financing and also meet international transparency and accountability standards for trust funds. The financing mechanism also requires further shaping in order to enable local administrations and the private sector to access ICCTF funding.
Indonesia can use the ICCTF to implement nationally appropriate mitigation actions (NAMAs), enabling it to meet its greenhouse gas reduction targets.
The project supports the ongoing development of the ICCTF, both institutionally and in terms of securing access for Indonesia’s local public and private sectors to international climate financing. This will facilitate implementation of the national and sub-national climate strategy in accordance with the principles of good financial governance.
The private sector is to be involved to a greater extent in the implementation of climate change mitigation measures going forward. This requires the development of adjusted financing mechanisms that provide sufficient incentive for mobilising the potential of the private sector.
There is also a need to effectively pool the different financing mechanisms available in Indonesia in order to fund the NAMAs.
The project assisted the ICCTF and the Ministry of National Development Planning (BAPPENAS) in establishing a new fund structure managed by BAPPENAS. The ICCTF has been operating as a department of BAPPENAS since late 2014. Using standard operating procedures, the project developed the public financing mechanism further in order to give state and non-governmental actors access to funding. It also financed an expert from the Centre for International Migration and Development (CIM), who played a decisive role in mobilising new funding for the ICCTF. Capacity development measures were implemented and specifically tailored to the needs of the operational units.