14 October 2020 – At the GCF Private Investment for Climate Conference 2020, Wednesday (14/10) Minister of Finance (Menkeu) Sri Mulyani Indrawati emphasized that despite being faced with a pandemic, Indonesia remains steadfast to its climate commitments.

The recovery time due to the Covid-19 pandemic is concurring with Indonesia’s effort in dealing with climate change crisis. This become a twin challenge for most developing countries that has limited fiscal and monetary capacity to tackle both problems.

“It is estimated that up to 5.23 million people will lose their jobs due to the pandemic in Indonesia”, said the Minister.

To respond the approaching crisis, there should be recovery packages that can addresse short- and long-term challenges, the ones that build a sustainable economy and taking into account a just transition for everyone in the process. The minister explained that Indonesia has allocated IDR695.2 trillion fiscal stimulus measure, in which 29% of it is goes to social protection schemes while 42% goes to tax incentives, credit, and stimulus for small and medium enterprises, state-owned enterprises and corporations.

“The stimulus also includes funding for labor-intensive green projects such as the mangrove restoration project covering 15,000 hectares and employing roughly 25,000 people in coastal areas”, The Minister continued.

Indonesia has several breakthroughs in climate action, which will continually improve. In the financing aspect, Indonesia has issued Green Sukuk, and public-private partnership scheme such as SDG Indonesia One and Environment Fund Management Agency (BPDLH). Moreover, the Government is currently in the process of drafting two Presidential Regulations on Carbon Pricing and on Purchasing Price for Renewable Energy Generation, which will facilitate private sectors to contribute to Indonesia’s low carbon development.

Quoting United Nation’s Deputy Secretary General Amina J. Mohammed which also present in the event, it is the investment that need to be made towards the global response on climate action. Therefore, the Minister Sri Mulyani also encouraged developed countries to strengthen its parallel effort in addressing climate crisis, in accordance with the pledge of providing USD100 billion per year by 2020 for climate action at the 15th Conference of Parties (15th COP) in 2009.

GCF, as the biggest climate fund in the world has the capacity to overcome the fiscal barriers that usually obscure developing countries, through various innovative fiscal instrument to de-risk and catalyze public and private investment to achieve transformative goal. In this event, the GCF highlights the importance of private sector involvement and investments that support low carbon development for climate action sustainability. Because apart from having the capital, private sector usually has a specialized expertise, and more resources in terms of technology, efficiency, and management.

The efforts done by the GCF are needed more than ever to escalate the decarbonation of global economy and strengthen resilience across the developing world to continue to find the solutions together.