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".

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. 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. 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. 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. 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. 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. 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. www.icctf.or.idIndonesia Climate Change Trust Fund
Milestones ICCTF 2020

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. 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. 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

13. Indonesia innovative approaches to financing:
Climate Change and Forest
Sustainable
forest ,
improved
community
livelihood ,
while
reducing
carbon
emission

14. 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.

15. FOREST MANAGEMENT UNIT (FMU)/
KESATUAN PENGELOLAAN HUTAN (KPH)

16. 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

17. Forest Management Unit (FMU) or
Kesatuan Pengelolaan Hutan (KPH)

18. 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

19. 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).

20. • 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

21. 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

22. ICCTF AND SMALL HOLDERS FINANCING
HKMHKM
HDHD
HTRHTR
HRHR
ICCTFICCTF