Management Of Environmental Funds Supports Sustainable Green Transformation In Indonesia, Especially The Vision Of Indonesia Gold 2045

Minister of Environment and Forestry (LHK) Siti Nurbaya. (Photo: Special)

JAKARTA - Based on the overall integrated environmental fund management mechanism, it is hoped that BPDLH or the Environmental Fund Management Agency can provide optimal and comprehensive service quality.

In addition, BPDLH also has a mixed funding capacity from the integration aspect of all sources of funds of various types so that it reproduces the impact measurements, both on the impact of reducing greenhouse gas emissions, economic and social impacts, in the context of supporting sustainable green transformation in Indonesia, in particular supporting the vision of Indonesia Gold 2045.

This hope was conveyed by the Minister of Environment and Forestry (LHK), Siti Nurbaya, in a press statement, Sunday, October 13, regarding the extraordinary role and impact of environmental fund management so far.

As is known, the Environmental Fund Management Agency (BPDLH), which is an institution of the Public Service Agency (BLU) was formed in 2019 under the Ministry of Finance with a Steering Committee of 10 main Ministries/Institutions (K/L) which are sector stakeholders in the target of achieving the National Determined Contribution (NDC).

So BPDLH as the main support system, of course, requires an institutional framework that will become the government's main vehicle in running the Environmental Economic Instrument (IELH) mechanism in a transparent, open, systematic, regular, measurable and structured manner.

The Minister of Environment and Forestry said that funding support for the forestry sector was also given to communities around the forest that already have a business in this field through the financing of revolving fund facilities and has now been distributed to around 30 thousand debtors with various programs such as delayed logging services in addition to the management of multi forestry businesses (MUK).

Other revolving fund services are also provided to economic circular businesses, especially for the communal magazine, RDF business and waste recycling mechanisms. The source of funds used comes from the management of the Debt Nature Swab (DNS) which was originally managed at the Ministry of Environment and Forestry.

On its way, said Minister Siti, BPDLH is expected to be able to manage funds from various sources, both public funds or private funds sourced from within the country and abroad and able to channel funds with various instruments to various purposes of green programs/projects.

The various purposes of the program are thoroughly divided into climate change mitigation (MPI) thematics and climate change adaptation (API). The themes included in the MPI framework include the theme of land, energy, transportation and waste-based sectors as well as waste. Meanwhile, API themes include preventing sea level rise, disaster control, energy and food security and environmental security.

As is known, the Government specifically manages environmental funds for the last four years. The funds are managed by the Environmental Fund Management Agency (BPDLH). As of September 2024, the total funds reached 1.6 billion US dollars or around Rp. 24.3 trillion.

On several occasions, the President Director of BPDLH, Joko Tri Haranto, said that all the managed funds already have owners in several ministries/agencies so that BPDLH only manages them.

"So don't be fooled by the amount because BPDLH only manages it. But in the agreement, we are also involved in determining the use, what kind of institution," Joko explained.

Joko Tri Haranto said, various sources of funds that have been managed at BPDLH consist of funds for forestry thematic programs and land use outside the region, new renewable energy, sustainable production and consumption, food, water and health security as well as adaptation and disaster risk management. Management of funds by BPDLH is carried out based on the mandate set up in the investment plan set by the K/L of the supervisor. If the land-based sector is KLHK, while blue financing is managed by KKP and energy via the Ministry of Energy and Mineral Resources.

Although there are 10 K/L who are the Steering Committee of BPDLH, the largest initial funds currently managed by BPDLH are intended for forestry funding and land use outside the region derived from bilateral cooperation between the Government of Indonesia and the Kingdom of Norway in supporting the achievement of the 2030 FOLU Nett Sink target and other multidonors from the Green Climate Fund (GCF).

MDBs funds such as the World Bank (WB) and also the Asian Development Bank (ADB) also have significant managed funds in BPDLH. Do not miss the mandate of APBN, philanthropic and catalytic funding management funds for initial start-up funding businesses.

Joko Tri Haryanto further put forward, the funds aimed at supporting forestry thematic programs and land use outside the area of around US$860 million. Based on the agreement signed with partner cooperation, the funds are incentive funds through performance-based payments for reducing greenhouse gas emissions in the forestry sector (Reducing Emission from Deforestation and Degradation/REDD+) of 43 percent of the total forestry thematic program funds and land use outside the region.

Other funds of 49% are funds earmarked for the rehabilitation of 75 thousand ha of mangroves in four provinces.

Referring to the existing investment plan, Minister of Environment and Forestry Siti Nurbaya explained, the allocation of the REDD+ performance-based payment funds is for various purposes, which include: (1) strengthening the possible conditions for the implementation of REDD+, (2) incentives to Local Governments that contribute to reducing greenhouse gas emissions, (3) other sectors besides forestry sectors that contribute to the NDC target and (4) community-based programs or community fund access services.

"The allocation of funds to strengthen the possible conditions has resulted in various new policies or strengthening existing policies, including policies related to REDD+ and the value of the carbon economy (NEK). In addition, various efforts have been made to increase capacity in understanding climate change control which is the commitment of the Indonesian government which is aimed at various group targets," said Minister Siti.

Regarding the incentive funds disbursed to the Provincial Government, said Minister Siti, currently eight incentive fund proposals have been approved for REDD+ approved by the Ministry of Environment and Forestry with varying values based on local government contributions in reducing national emissions. Meanwhile, incentive funds to support the implementation of forestry operational plans and land use outside the region at the provincial level have been distributed to four Provincial Governments.

"Several other local government proposals, either incentive funds for REDD+ or funds related to forestry operational plans and land use outside the region, are in the process of being assessed. These incentive funds will be invested in land-based programs which are expected to contribute to the reduction of provincial and national emissions," he said.