The Green Climate Fund until the end of 2019 has committed to channel funding of USD 5.6 billion of fund to various climate change impact mitigation and adaptation projects in 147 countries around the world. This is the initial stage of the realization of developed countries obligations to support developing countries. Currently, an additional allocation of USD 9.78 billion has been provided by developed countries through the GCF in achieving their commitments which are targeted to reach USD 100 billion by 2020. Although the fund allocation through the GCF is still far from target, there are ample opportunities for developing countries to submit proposals to the GCF to get assistance in achieving climate change targets in their respective countries.
Since its founding in 2010 to October 2019, the GCF has funded 123 projects worldwide which comprises of 40% mitigation projects, 25% adaptation projects, and the remaining 35% are projects with combined objectives (cross-cutting projects). To finance all of the projects under this commitment, the GCF has allocated USD 5.4 billion with a composition of 45% disbursed for grants, 41% for loans, 9% for equities, 4% for result-based payment (RBP) and 1% for guarantees.
The GCF does not limit the amount of funds channeled to each country. However, the stringent requirements to ensure positive impact is resulted from the projects on climate and environment funded cause only a few parties to successfully access the climate finance. In Indonesia, the GCF through the Fiscal Policy Agency, which is appointed as the National Designated Authority in 2018, has financed four climate change-related projects in the country, namely the preparation of the Bus Rapid Transit project in Semarang which implementation started in 2019, Climate Investor One for renewable energy power plant that was approved by the GCF in 2018, the Geothermal Resources Risk Mitigation (GREM) Project with the World Bank which was also approved by the GCF in 2018, and the Readiness and Preparatory Support Program with the Global Green Growth Institute (GGGI) Indonesia which has been ongoing since 2017. The GCF funds that have been distributed to the four projects reached more than USD 200 million.
The FPA, who has been acting as an early stage appraisal of the GCF projects’ feasibility in Indonesia, has been facilitating government agencies, businesses, and non-governmental organizations in accessing GCF funds throughout the past two years. Indonesia has a great potential to utilize the GCF funds in achieving its climate targets. The GCF has allocated USD 1.6 billion for the Asia Pacific region, or 16% of the total funds currently managed by the institution based in Incheon, South Korea.
In 2019, the FPA has actively reached out to stakeholders who can play a role in assisting Indonesia in mitigating and adapting to climate change. Through the dissemination of information about the GCF and various trainings, the FPA helps stakeholders understand the process of submitting funding proposal to the GCF and the governance of the global funding.
As the end of 2019, there were five Concept Notes that had been received from stakeholders and obtained the NDA’s approval to be submitted to the GCF. These five concept notes are from Kigali First Mover, Mitigation of Greenhouse Gas Emissions through Sustainable Landscape and Forest Management to be implemented in provinces/regions of North Sumatra and West Papua, Sustainable Landscape Programs in Bukit Tigapuluh National Park in Jambi and East Kalimantan, the development of small-scale agricultural system that are resistant to climate change in East Nusa Tenggara, and a circular economic mainstreaming program for low carbon investment in Indonesian tourism industry, specifically in Lake Toba.
Interests to access the climate fund is increasing and dozens of institutions have expressed their interests in line with the increased capacity and knowledge of these institutions about the GCF. Until March 2020. the FPA has received 165 Concept Notes from various stakeholders through the Call for Project Concept Note process, and the selection process has shortlisted 47 proposals.
The stakeholders will undergo the process of refining their Concept Notes in accordance with the GCF standards and matchmaking with potential Accredited Entities. After that, together with the Accredited Entity, the stakeholders can develop and send their Concept Notes to the GCF. If the project in the form of a full proposal is ready to be submitted to the GCF, the Accredited Entities can request a No-Objection Letter from the FPA. For those who have not succeeded, this opportunity can be a learning point in increasing their capacity and quality of activities and institutions so they can meet the qualifications and requirements for accessing GCF funds in the future.
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