Innovative approaches to financing for
inclusive green returns:
Indonesia case
BASAH HERNOWO
Director for Forestry and Wat...
www.icctf.or.idIndonesia Climate Change Trust Fund
Establishment:
3 September 2009
Funding:
Blend the state budget and
int...
www.icctf.or.idIndonesia Climate Change Trust Fund
Forest-Climate Finance Institution
Government’s
State Budget
Internatio...
www.icctf.or.idIndonesia Climate Change Trust Fund
Organizational Structure
Structure of PREP-ICCTF
(current)
Structure of...
www.icctf.or.idIndonesia Climate Change Trust Fund
Sustainable Peatland
Management
1.Banjarbaru, South
Kalimantan
2.Jabire...
www.icctf.or.idIndonesia Climate Change Trust Fund
Health Vulnerability: Assessment, Mapping,
and Community Based Adaptati...
www.icctf.or.idIndonesia Climate Change Trust Fund
Toward NFE
Application for the Green Climate Fund
Lessons learned
•Orga...
www.icctf.or.idIndonesia Climate Change Trust Fund
Milestones ICCTF 2020
www.icctf.or.idIndonesia Climate Change Trust Fund
SGP (Small Grants Program)
Projects as Innovation Phase
Enhancing Carbo...
www.icctf.or.idIndonesia Climate Change Trust Fund
1. ICCTF pools and aligns resources provided either by Indonesian
gover...
www.icctf.or.idIndonesia Climate Change Trust Fund
Proposed Approach for PPP
ICCTF will support
(capacity building, FS
dev...
Indonesia innovative approaches to financing:
Climate Change and Forest
Sustainable
forest ,
improved
community
livelihood...
Examples from ICCTF on Biomass Energy Estate
Forest Management Unit or Kesatuan
Pengelolaan Hutan (KPH) Gerbang
Lestari at...
FOREST MANAGEMENT UNIT (FMU)/
KESATUAN PENGELOLAAN HUTAN (KPH)
Forestry Sector Main Challenge:
Contribution to the Sustainable Development
• Generating revenues from forest resources th...
Forest Management Unit (FMU) or
Kesatuan Pengelolaan Hutan (KPH)
FMU FINANCING SCHEME FOR SUSTAINABLE FOREST
MANAGEMENT
FMU/
KPH PartnershipPartnership
REDD+
Communities
forest
Environmen...
Forest Utilisation inside FMUForest Utilisation inside FMU
WILAYAH
TERTENTU
(Special Zone)
IUPHHK-HA
IUPHHK-HT
HTR
HKM
HD
...
• ENVIRONMENTAL
SERVICES
• NON-TIMBER FOREST
PRODUCTS
• FOREST AREA FOR
SOCIAL AND OTHER
PURPOSES
• TIMBER PRODUCTS
• NON-...
Development of 600
FMUs across Indonesia
forest
Transforming 120
FMU Prototypes
120 FMU Prototypes to
Ministry of Forestry...
ICCTF AND SMALL HOLDERS FINANCING
HKMHKM
HDHD
HTRHTR
HRHR
ICCTFICCTF
Innovative approaches to financing for inclusive green returns: Indonesia's case
Innovative approaches to financing for inclusive green returns: Indonesia's case
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Innovative approaches to financing for inclusive green returns: Indonesia's case

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This presentation by Basah Hernowo, Director for Forestry and Water Resources Conservation, Indonesia National Development Planning Agency, given at the Forests Asia summit during the discussion forum "Investments: Innovative approaches to financing for inclusive green returns " introduced the Indonesia Climate Change Trust Fund, explained about the Forest-Climate Finance Institution and the ICCTF pilot project from 2010 to 2011 and how the Green Climate Fund is applied. It furthermore introduces a plethora of other projects that have launched during the "Innovation Phase".

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  • Pada bulan September – Oktober 2012 telah menyetujui pendanaan 3 proyek baru untuk dilaksanakan pada 2012-2014 (total US$ 4 juta):
    1. Manajemen Lahan Gambut Berkelanjutan (Kementan)
    2. Kerentanan Kesehatan (Kemenkes)
    3. Pengelolaan Hutan Rakyat (Kemenhut)
  • Pada bulan September – Oktober 2012 telah menyetujui pendanaan 3 proyek baru untuk dilaksanakan pada 2012-2014 (total US$ 4 juta):
    1. Manajemen Lahan Gambut Berkelanjutan (Kementan)
    2. Kerentanan Kesehatan (Kemenkes)
    3. Pengelolaan Hutan Rakyat (Kemenhut)
  • Innovative approaches to financing for inclusive green returns: Indonesia's case

    1. 1. Innovative approaches to financing for inclusive green returns: Indonesia case BASAH HERNOWO Director for Forestry and Water Resources Conservation Indonesia National Development Planning Agency Presented at Forest Asia Summit, 5 May 2014, Shangri-La Hotel Jakarta Ministry of National Development Planning
    2. 2. www.icctf.or.idIndonesia Climate Change Trust Fund Establishment: 3 September 2009 Funding: Blend the state budget and international contribution Goal: To support the GoI efforts to reduce GHG emissions, move the country towards a low carbon economy, and‐ adapt to the negative impacts of climate change. Purpose: 1.Mainstreaming CC issues into national, provincial & local development planning 2.Implementing GHG emissions mitigation and adaptation initiatives Establishment: 3 September 2009 Funding: Blend the state budget and international contribution Goal: To support the GoI efforts to reduce GHG emissions, move the country towards a low carbon economy, and‐ adapt to the negative impacts of climate change. Purpose: 1.Mainstreaming CC issues into national, provincial & local development planning 2.Implementing GHG emissions mitigation and adaptation initiatives What makes ICCTF Unique 1. Strategic Role • Implementation of RAN & RAD-GRK • Support to implementation of RAN-API • NAMAs support facility for Indonesia 2. Triggering Initiatives • Alternative funding mechanism to blend international and domestic funds • Strategic and innovative pilot projects funding for further replication 3. Direct Access Endorsement to be National Funding Entity accredited with the GCF What makes ICCTF Unique 1. Strategic Role • Implementation of RAN & RAD-GRK • Support to implementation of RAN-API • NAMAs support facility for Indonesia 2. Triggering Initiatives • Alternative funding mechanism to blend international and domestic funds • Strategic and innovative pilot projects funding for further replication 3. Direct Access Endorsement to be National Funding Entity accredited with the GCF Investment Windows Land Based Mitigation Energy Resilience and Adaptation Indonesia Climate Change Trust Fund
    3. 3. www.icctf.or.idIndonesia Climate Change Trust Fund Forest-Climate Finance Institution Government’s State Budget International Development Cooperation Bilateral Multilateral Ministry of National Development Planning (Bappenas) REDD+ AgencyMinistry of Forestry Funding Source Responsible Ministry/ Agency Institution Disbursement Mechanism Focus Area Forest Management Unit Indonesia Climate Change Trust Fund (ICCTF) Millennium Challenge Account Indonesia (MCAI) Fund for REDD+ Indonesia (FREDDI)* • Direct grant to FMU through state budget mechanism • Joint venture with communities, cooperatives, private comp. Grant to Executing Agency (central govt.) & Implementing Agency (central & local govt., academia, CSO, private) • Grant to community; • Loan to private sector. Grant, loan, equity investment, performance base. non-timber forest products, environmental services, community timber products, carbon business 1. Land Based Mitigation 2. Energy 3. Resilience & Adaptation 1. Participatory Land Use Planning; 2. Technical and Oversight Assistance 3. Financial Facility 4. Green Knowledge Implementation of REDD+ National Strategy Other Gov’t Ministries/ Agencies Develop- ment Programs Grant, research, technical assistance 1.Mitigation 2.Adaptation *) Under discussion
    4. 4. www.icctf.or.idIndonesia Climate Change Trust Fund Organizational Structure Structure of PREP-ICCTF (current) Structure of LWA-ICCTF (Perpres 80/2011) Board of Trustee/ Majelis Wali Amanat (MWA) oChair (Bappenas) oSecretary oMembers (GoI, donors, CSO, private, academia) National Fund Manager/ Pengelola Dana Amanat (PDA/Bank Mandiri) Secretariat -Executive Director -Professional Staff KPA Supporting Unit (appointed Bappenas Staff) Executing Agency/ Pengelola Proyek Implementing Agency/ Pelaksana Proyek Contract, Approval & Guidance Fund Transfer Reporting
    5. 5. www.icctf.or.idIndonesia Climate Change Trust Fund Sustainable Peatland Management 1.Banjarbaru, South Kalimantan 2.Jabiren, Central Kalimantan 3.Muaro, Jambi 4.Pelalawan, Riau 11. Sidoarjo, East Java 12. Kediri, East Java 13. Kudus, Central Java 14. Muara Enim, South Sumatra 15. Pekanbaru, Riau 16. Tanjab Barat, Jambi 17. Porsea, North Sumatra 18. Deli, North Sumatra Energy Conservation 1. DKI Jakarta, Jakarta 2. Tangerang, Banten 3. Serang, Banten 4. Bekasi, West Java 5. Bandung, West Java 6. Bogor, West Java 7. Klaten, Central Java 8. Semarang, Central Java 9. Surabaya, East Java 10. Gresik, East Java Public Awareness & Education 1. Serdang Bedagai. 2. North Sumatra 3. Batu, Malang, East Java 4. Bau-Bau, SouthEast Sulawesi 5. Kamal Muara, North Jakarta 6. Indramayu, West Java ICCTF Pilot Project 2010-2011
    6. 6. www.icctf.or.idIndonesia Climate Change Trust Fund Health Vulnerability: Assessment, Mapping, and Community Based Adaptation on Dengue Hemorrhagic Fever and Malaria Diseases (ICCTF-MoH) 1. West Sumatra 2. DKI Jakarta 3. East Java 4. Bali 5. Central Kalimantan ICCTF On-going Projects 2012-2014 Sustainable Management of Degraded Peatland to Mitigate Green House Gas Emissions and Optimize Crop Productivity (ICCTF-MoA) 1.Papua 4. Riau 2. Kalimantan Barat 5. Jambi 3. Kalimantan Tengah Enhancing Sustainable Management of Community-Based Wood Pellets Production as Biomass Energy to Support Low Carbon Economy and Climate Change Mitigation in Bangkalan, Madura, East Java (ICCTF- MoFor) 1. Bangkalan, Madura
    7. 7. www.icctf.or.idIndonesia Climate Change Trust Fund Toward NFE Application for the Green Climate Fund Lessons learned •Organizational set up needs to be clear and certain (The ICCTF is transitioning to become a self-managed National Trust Fund) – ICCTF is currently at the final stage on a transition plan to a National Trust Fund management structure that comprises of a Board of Trustees (Majelis Wali Amanat/MWA), a National Fund Manager (Pengelola Dana Amanat/PDA), a Secretariat and a Supporting Unit of State Budget Owner (Kuasa Pemegang Anggaran/KPA). •Applicants need to be able to meet fiduciary standards related to financial management (transparency and efficient spending is key) •requires existing successful track record in delivering development programs. •Further strategically important investments are made in the institutional development of the ICCTF through funds provided by the German government to enhance “climate finance readiness”
    8. 8. www.icctf.or.idIndonesia Climate Change Trust Fund Milestones ICCTF 2020
    9. 9. www.icctf.or.idIndonesia Climate Change Trust Fund SGP (Small Grants Program) Projects as Innovation Phase Enhancing Carbon Sequestration in Community Forest as a Landbased Mitigation Action (ARuPA, Bantul) Public-Private Partnership Model in Climate Change Mitigation Action in Conservation Area (FoF-IPB, Riau) Adaptation on Seaweed Aquaculture (LSM HUMANIORA, Kendari) Planning and Information System for Street Lighting Energy Efficiency (Politeknik ATMI, Surakarta) Strengthening Climate Information System for Farmers and Fishers (PIKUL, Kupang) Strengthening Coastal Community Resilience through Participatory Multimedia Technology (Bingkai)
    10. 10. www.icctf.or.idIndonesia Climate Change Trust Fund 1. ICCTF pools and aligns resources provided either by Indonesian government or by private sector entities to support a mutually‐agreed portfolio of projects and programmes. 2. ICCTF will act as a financial portal to receive and distribute funds from international Funds, development partners, and other climate change funding mechanisms (Green Climate Fund, NAMAs Facility, Adaptation Fund, EU Global Efficiency and Renewable Energy Fund, etc). 3. ICCTF could be the main vehicle to fund the programs/activities of internationally supported NAMAs (up to 41% target). Role of ICCTF: ‘NAMAs Support Facility’ Note: ICCTF as ‘Climate Change Finance Registry’ is decided on Policy Coordination on July 15, 2013
    11. 11. www.icctf.or.idIndonesia Climate Change Trust Fund Proposed Approach for PPP ICCTF will support (capacity building, FS development etc) directly the project on the pipeline – special procedure apply ICCTF is ready with procedure & SOP for open tender for all projects ICCTF is ready to finance not only ‘enabling condition’ but also investments needed
    12. 12. Indonesia innovative approaches to financing: Climate Change and Forest Sustainable forest , improved community livelihood , while reducing carbon emission
    13. 13. Examples from ICCTF on Biomass Energy Estate Forest Management Unit or Kesatuan Pengelolaan Hutan (KPH) Gerbang Lestari at Bangkalan, Madura plants Calliandra callothyrsus or Red Calliandra to produce wood pellet.
    14. 14. FOREST MANAGEMENT UNIT (FMU)/ KESATUAN PENGELOLAAN HUTAN (KPH)
    15. 15. Forestry Sector Main Challenge: Contribution to the Sustainable Development • Generating revenues from forest resources through timber and non-timber forest products, biodiversity, food, energy, and medicine • Forest based clustery industry to improve the synergy between up-stream and down-stream industry • Provide employment opportunities • Reduce poverty on the communities living inside and surrounding forest areas • Environmental and biodiversity protection, including development of environmental services • Implementation of good forest governance
    16. 16. Forest Management Unit (FMU) or Kesatuan Pengelolaan Hutan (KPH)
    17. 17. FMU FINANCING SCHEME FOR SUSTAINABLE FOREST MANAGEMENT FMU/ KPH PartnershipPartnership REDD+ Communities forest Environment services Non-timber forest products Carbon trading Sustainable forest management Sustainable forest management Forest conservation Forest conservation Biodiversity Revenues and employments Government initial investment Carbon Emission Reduction Carbon Emission Reduction INVESTMENT
    18. 18. Forest Utilisation inside FMUForest Utilisation inside FMU WILAYAH TERTENTU (Special Zone) IUPHHK-HA IUPHHK-HT HTR HKM HD Community empowerment Private Cooperation s Forest Utilisation in the Special Zone (Permenhut 47/2013) A.Sustainable forest investment B.Establish cooperation or joint venture with communities, BUMN/D/S, Cooperatives, small scale business).
    19. 19. • ENVIRONMENTAL SERVICES • NON-TIMBER FOREST PRODUCTS • FOREST AREA FOR SOCIAL AND OTHER PURPOSES • TIMBER PRODUCTS • NON-TIMBER FOREST PRODUCTS PRODUCTION FOREST PROTECTED FOREST TYPES OF FOREST UTILISATION IN THE SPECIAL ZONE ON PROTECTED AND PRODUCTION FMU TYPES OF FOREST UTILISATION IN THE SPECIAL ZONE ON PROTECTED AND PRODUCTION FMU
    20. 20. Development of 600 FMUs across Indonesia forest Transforming 120 FMU Prototypes 120 FMU Prototypes to Ministry of Forestry and Local Governments according to each institution’ function Covers: a. Legally clean dan clear forest area b. Institution dev’t c. Planning (development and business plan) d. Doing businesses FMU DEVELOPMENT STRATEGY 2015-2019 GOOD FOREST GOVERNANCEGOOD FOREST GOVERNANCE
    21. 21. ICCTF AND SMALL HOLDERS FINANCING HKMHKM HDHD HTRHTR HRHR ICCTFICCTF

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