The urgency of a coordination mechanism between climate finance focal points in Indonesia to achieve the Nationally Determined Coordination (NDC) target effectively and efficiently has increasingly become more apparent. In October 2020, the Fiscal Policy Agency of Indonesia’s Ministry of Economic (FPA), as the National Designated Authority Green Climate Fund (NDA GCF), initiated a preliminary meeting to discuss the idea of a coordination mechanism between climate finance focal points in Indonesia. This meeting was held to synergize all efforts in achieving the NDC targets. In the third meeting that was held on April 7th, 2021, all participating climate finance focal points discuss the characteristics and uniqueness of each funding institution; from the governance, project cycle, financing instruments, and targeted sectors.

As an introduction to the main discussion on the climate finance characteristic, the FPA explains the initial findings of a study on the Climate Change Focal Point Coordination Forum policy paper development. The policy paper development intended to have a projection on Indonesia’s financing gap against the NDC target in both the private and public sectors from 2020 to 2030, and to formulate a mobilization strategy. The study takes into consideration various funding supply and demand scenarios; one of them is the disruption caused by the COVID-19 pandemic.

International climate financing such as Green Climate Fund (GCF), Global Environmental Facility (GEF), and Adaptation Fund (AF) become an alternative source of funding from multilateral cooperation, which is highly considered in this study. However, although Indonesia has a huge source of potential funding, the funds that have been distributed are still very limited. The initial findings of this study show several strategies from the donor side that could help to overcome those barriers. For instance, by strengthening the information dissemination strategy regarding the standards required by each climate financing, along with their characteristic to help project proponents adapting to their needs.

The climate finance focal points coordination mechanism forum is trying to initiate the development of a climate change financing platform. The expectation is to have every climate finance focal point synergizing their funding area through an information-sharing mechanism that is transparent and accessible by the public. In this follow-up meeting, each climate finance focal point discusses the trend and track record of their funding disbursement.

Each climate finance focal point also shares the focus areas of their funding. Until now, international financing such as GCF, GEF, and AF still has a huge focus area; which follows the Indonesia NDC and RPJMN. Meanwhile, other financings such as Indonesia Climate Change Trust Fund (ICCTF), Environmental Fund Management Agency (Badan Pengelola Dana Lingkungan Hidup/BPDLH), and SDG Indonesia One (SIO) that is managed by PT. SMI have more specific focus area such as on program based on marine, forestry, and infrastructure. It can be seen through several projects that have been implemented in 2020 and their work plan for the next few years.

Not only the characteristic of the funding sector, but each climate finance focal point also agreed that a variety of environmental and social standards are required. This has long been a major obstacle for project proponents in Indonesia. The presence of this forum and the planned information platform are expected to boost the capacity of the potential climate project proponents widely and significantly. In addition, this platform is expected to improve the efficiency of climate financing and to avoid overlapping funding in similar projects or programs.double funding).