PT Sarana Multi Infrastruktur (Persero) is currently the only GCF Accredited Entity in Indonesia. Its status as a DAE (Direct Accredited Entity) gives PT SMI the flexibility to coordinate and submit program/project proposals directly to the Green Climate Fund.

PT SMI’s accredited status has paved the way for Indonesia to utilize the world’s largest global climate fund in its efforts to mitigate and adapt to the climate change impacts, especially in pursuing the target of greenhouse gas emission reduction by 2030 according to the commitments made in the UNFCCC Paris Agreement. However, the mandate of PT SMI is limited only to infrastructure financing, while many other sectors also contribute to reducing emissions and taking part in GCF focus areas. Therefore, the opportunity is still wide open for other Indonesian entities to become an Accredited Entity or to conduct programs/projects with GCF funding assistance.

How was PT SMI’s own experience in the accreditation process? Are there any useful tips to attain the accreditation?

PT SMI views the GCF as an appropriate source of funding to carry out its responsibilities as the Ministry of Finance’s Special Mission Vehicle (SMV). The GCF's objectives in aiding the climate change mitigation and adaptation efforts are in line with the company’s mandate as a catalyst for accelerating infrastructure development, namely to support the achievement of low-carbon sustainable development goals that are sentient to social and environmental impact.

However, it cannot be denied that the process of accreditation and/or proposal application to the GCF is indeed extensive and time-consuming to ensure the suitability of the proposed program/project with the six GCF investment criteria. These investment criteria include a clear climate rationale, alignment with the priorities and commitments of the country concerned, as well as consideration of social and gender inclusion.

“The climate rationale or data related to the impact of the proposed project on climate change and the target of greenhouse gas emission reduction need to be communicated in detail to the GFC,” said Head of the Sustainable Financing Division of PT SMI Pradana Murti.

The climate rationale aspect is indeed one of the main issues raised by the Fiscal Policy Agency (FPA) in evaluating the Concept Notes submitted by stakeholders in 2019 until early 2020 in the Call for Project Concept Notes. This becomes the basis of the argument that the proposed program/project is truly relevant in addressing the impacts of climate change, thereby increasing the chance of getting approval from the FPA and the GCF.

PT SMI supports Indonesian entities to access GCF funds through PT SMI as the DAE or any other Accredited Entities. At present, PT SMI is facilitating the financing of the Semarang Bus Rapid Transit (BRT). The land transportation sector has a large contribution to the greenhouse gas emissions. With Semarang’s greener funding, it is hoped that the project can help reduce Indonesia’s greenhouse gas emissions.

In addition, PT SMI is also the executing entity in debt financing disbursement for the Geothermal Resource Risk Mitigation (GREM) project funded by the GCF through the World Bank as its Accredited Entity.