1. The Feasibility of National Climate Fund A Case of Indonesia Climate Change Trust Fund Amin Budiarjo National Project Manager PREP-ICCTF Regional Clinic on the Design and Management of National Climate Funds Bangkok, 6 September 2012 ICCTF Secretariat Wisma Bakrie 2 Building, 6th floor Jl. H.R. Rasuna Said Kav. B-2, Jakarta 12920, Indonesia Phone: +62 21 57945760, Fax: +62 21 57945759 Email: secretariat@icctf.or.id, Web: www.icctf.or.idsecretariat@icctf.or.id

2. Structure of Presentation 1. Fund at a Glance 2. Rationale behind the Establishment 3. Process of Establishment 4. Lessons Learned www.icctf.or.id

3. Fund at a Glance www.icctf.or.id Objective: 1.To achieve Indonesia’s goals of a low carbon economy and greater resilience to climate change; 2.To enable the Government of Indonesia (GoI) to increase the effectiveness and impact of its leadership and management in addressing climate change issues. Governing body: Steering Committee, Technical Committee, Secretariat, Fund Manager Legal status: government trust fund (ministerial decree) Capital: USD 11.2 million (2010-current) Beneficiaries: central government (Executing Agency); central and local government, universities, CSO, NGO, private sector (Implementing Agency) Indonesia Climate Change Trust Fund (ICCTF), Indonesia

4. Fund at a Glance www.icctf.or.id Steering Committee Plenary Members Observer/ Resources Person GOI Members (Chairman and Vice Chairman from Bappenas) Technical Committee GOI Members (Chair& Co-Chairs from Bappenas & Ministry of Finance) Representatives of Plenary Members ICCTF Secretariat Executing Agency (Central Govt. Agency) /Implementing Agency (Govt. Agency, University, CSO/NGO, Private Sector) Fund Management National Fund Manager UNDP as Interim Fund Manager Legend : Project Proposal Approval and Assignment Fund Channeling Monitoring and Supervision Current Structure and Work Flow

5. Rationale behind the Establishment www.icctf.or.id National Background Vulnerability to the negative impacts of climate change Though Indonesia is not mandatory for GHG emission reduction, climate change is a reality and urgent actions on adaptation and mitigation is required as an integral part of the development challenge facing the nation Mitigation and adaptation actions have to be taken jointly by all countries. Indonesia is ready to cooperate both bilaterally and multilaterally with international efforts. International Background UNFCC 1992, Article 3.4 incorporate climate change into national development planning; Article 4.1 underlines the needs of all countries to develop specific national development priorities and objectives accordance to principles of common but differentiated responsibilities Kyoto Protocol to UNFCCC 1998 states emission reduction is binding for developed countries. Bali Action Plan 2007 includes the request for developed countries to contribute to mitigation of global warming in the sustainable development context and envisages enhanced actions on adaptation, technology development and on the provision financial resources and measures against deforestation

6. National Action Plan on GHG Emission Reduction (RAN-GRK) www.icctf.or.id Presidential Regulation No.61/2011 Regarding National Action Plan on GHG Emissions Reduction (RAN-GRK) Sectors: Agriculture, Forestry & Peatland, Industry, Energy & Transportation, Waste Presidential Regulation No.61/2011 Regarding National Action Plan on GHG Emissions Reduction (RAN-GRK) Sectors: Agriculture, Forestry & Peatland, Industry, Energy & Transportation, Waste www.icctf.or.id President’s Commitment at G-20 Pittsburgh and COP15 Reducing green house gas emission by 2020 President’s Commitment at G-20 Pittsburgh and COP15 Reducing green house gas emission by 2020 26% 26+15=41% GoI efforts (Unilateral NAMAs) GoI efforts and International supports (Supported NAMAs) Rationale behind the Establishment

7. Mainstreaming Climate Change into National Development Agenda www.icctf.or.id Bi-/Multilateral cooperation BALI ACTION PLAN PRESIDENT’S STATEMENT at G-20, 2009 PRESIDENT’S STATEMENT at G-20, 2009 Mitiga- tion Adapta -tion ICCTFICCTF ROADMAP(ICCSR)ROADMAP(ICCSR) Bridges National Action Plan on CC into 5 yr mid-term development plan (RPJM) 2010-2014 & inputs till 2030. ICCTF- International financing mechanism channeling investment funds into national CC initiatives. GoI’s own budget Mainstrea ming into RPJM RAN - GRK Mainstrea ming into RPJM RAN - GRK Yellow Book Yellow Book Rationale behind the Establishment

8. Policy Documents on Climate Change (1) www.icctf.or.id PolicyContent Long-Term Development Plan (RPJPN) 2005-2025 In order to achieve the vision of sustainable development, the GoI concluded that "the long term sustainability of development will face the challenges of climate change and global warming which affect activities and livelihood". National Action Plan on Climate Change (RAN-MAPI), 2007 Initial guidance for a multi-sectoral coordination effort designed to address jointly the challenges of mitigation and adaptation to climate change National Development Planning: Indonesian Responses to Climate Change (Yellow Book), 2007-2010 It was intended to strengthen and reinforce the RPJMN (National Medium-Term Development Plan) 2004-2009 as well as to include inputs that can guide the integration of considerations of climate change into the preparation of RPJMN 2010-2014 Medium-Term Development Plan (RPJMN) 2010-2014 It emphasizes 11 national priorities, which 3 of them (food security, energy, and environment and disaster management) are strongly related to climate change. Indonesia Climate Change Sectoral Roadmap (ICCSR), 2010 A roadmap to serve as a detailed policy guidance and in order to mainstream climate change issues into national development planning. Presidential Regulation No.61/2011 regarding National Action Plan on GHG Emission Reduction (RAN-GRK), 2011 National action plan for mitigation to achieve the national targets of emission reduction (-26% and -41% of the BAU scenario until 2020). It contains policy directions and actions for mitigation in 5 sectors and constitutes important guidance for channeling financial flows into national and local mitigation programs.  Local Action Plan on GHG Emission Reduction at provincial level

9. Policy Documents on Climate Change (2) www.icctf.or.id PolicyContent Presidential Regulation No.71/2011 regarding National GHG Inventory System, 2011 Regular information on the level, status and trend of GHG emission change and absorption, including national, and subnational carbon stock as well as GHG emission reduction. Presidential Instruction No. 10/2011 on Forest Moratorium, 2011 Development of REDD+ schemes including Indicative Moratorium maps Presidential Decree No. 25/2011 on National Task Force for REDD+, 2011 REDD+ agency and related institutional development (finance and MRV) In addition to that, also Government regulation on trust fund Presidential Regulation No.80/2011 regarding Trust Fund, 2011 Establishment, structure and operation of a trust fund

10. Funding Scheme for Climate Change www.icctf.or.id Bilateral: Japan (JBIC & JICA) England (DFID) Australia (AusAID) Denmark (DANIDA) Netherlands German (Kfw & Gtz) Norway Canada (CIDA) Sweden (SIDA) Multilateral: World Bank ADB UNDP EC GEF (Convention): Special Climate Change Fund (SCCF) Sources: Bilateral Adaptation Fund (Protocol) CDM: Bilateral, Multilateral & Unilateral 2. UNFCCC Financing Mechanism: Multilateral 1. ODA*) Rules and Regulations: Global Financing Mechanism Grant GOI Mechanisms**) Loan: CC (Local) Trust Fund 1. Sector/ Project Loan 2. Program Loan Notes: *): expected come from additional existing ODA comittment from Monterey Concensus (ODA+) **): comply with Government Regulation No.2/2006 : Climate Change Program Loan Debt for Nature Swap OTHERS: GEF (Non-Convention): Strategic Priority on Adaptation (SPA) Resource Allocation Framework (RAF)

11. Process of Establishment www.icctf.or.id Milestone Vision of GoI to play bigger role in coordinating & implementing all climate change activities in Indonesia (2008) Bottom up initiatives agreed among GoI institutions to setup a national trust fund for climate change (2008) Develop Blue print of ICCTF (2009) Establish decree of ministerial decree on ICCTF establishment (2009) Grant Agreement with donor, LoA & Prodoc on PREP-ICCTF (2009) Establish ICCTF Secretariat, develop and operationalize SOP (2010) Resources and Support Political support: President’s commitment on GHG emission reduction and consensus from all line ministries Champion: Ministry of National Development Planning and Ministry of Finance, involving around 10 officials from both ministries Resources allocated: USD 250,000 for Blue print development (by EU Grant - GIZ); and counterpart budget and in-kind contribution from GoI

12. Required Institutional Capacity www.icctf.or.id Institutional Arrangement Management: organizational development, resource mobilization, system development & operation, project management Operation Finance: financial management & accounting Administration: administration & HR Monitoring & Evaluation: M&E in project planning, implementation, and impact assessment Communication: external & internal communication, IT, database Audit: External & Internal Audit Technical Substance Thematic expertise in priority areas: policy dialogue, project appraisal, project implementation, impact assessment

13. Lessons Learned (2010-2012) www.icctf.or.id Establishment of Secretariat and fully functioning financing institution. Climate change policy dialogue and coordination forum. Selection, funding, monitoring and evaluation of 3 pilot projects. Development of Business Plan and investment strategy including priority programs, proposed activities and budget plan. Assessment and application to be the NIE of Adaptation Fund Model in development of Presidential Regulation on Trust Fund. Achievements Administered under the Ministry of National Development Planning Capacity of project implementer (Executing Agency, Implementing Agency & Project Management Unit) to adapt to a new project management system and to comply with robust M&E system in project implementation. Comprehensive assessment during project selection process Limited involvement of CSOs in policy dialogue. Accelerated growth of responsibilities and staffing Support to GoI activities (RAN/RAD-GRK, UNFCCC COP/CMP) Challenges GoI commitments and policies related to climate change and trust fund Support (fund contribution & TA) from development partners Established by the Ministry of National Development Planning and Ministry of Finance Support from line ministries at central government during operation Success Factor

14. Way Forward www.icctf.or.id 2011 - 2013 Improvement of institutional capacity 2011 - 2013 Transition to fully National Trust Fund arrangement 2013 - 2015 Involvement of wider stakeholders in project implementation 2011 - 2020 Assessment to be NIE of International Climate Fund (AF, GCF)