Recently I have started an exciting project of an institutional building to help channeling billion dollars of the Green Climate Fund (GCF) money to Indonesia. This money will have an enormous impact; it supports Indonesia’s ambition to implement low carbon development in its way to be a developed country by 2033. I worked with a team of consultants funded by the Climate Development Knowledge Network (CDKN), an alliance of organisations led by PricewaterhouseCoopers LLP (PwC), and including Fundación Futuro Latinoamericano, LEAD International, LEAD Pakistan, the Overseas Development Institute, and SouthSouthNorth

 

The project I involve in aims to strengthen Indonesia’s national designated authority (NDA) of the GCF by providing technical assistance and capacity building. In the beginning of 2016, the Ministry of Finance’s Fiscal Policy Agency has been designated as the NDA for Indonesia. Some of the specific objectives of this project are to:

  • provide recommendations for NDA institutional set up, interim policies and procedures, as well as to
  • provide recommendations to bring the NDA function in line with GCF guidelines and best practices
  • Provide technical support and assistance to the NDA for accessing the GCF readiness funds
  • Build capacity of NDA staff on processes and requirements for accessing and implementing GCF readiness funds
  • Share communication lessons in accessing GCF readiness funds for informing climate finance/GCF dialogue at national and global levels

There are three main elements which should be in place to meet the GCF standards for Indonesia to access the GCF money: a legitimate NDA, trustworthy accredited entities and bankable projects. The NDA is mainly expected (1) to be able to assess the alignment of projects seeking for GCF’s fund by providing a no-objection letter for each proposed project through a sound procedure (2) to be able to analyse which institutions are deserve to be nominated as national implementing entities (NIE) and/or sub-national implementing entities in the GCF’s accreditation process. The NIE and SIE will manage and channel the GCF money and play a significant role to ensure the proposed project meets the GCF standards while the NDA will ensure the alignment of the projects with national and sub-national development policies.

 

Indonesia has PT Sarana Multi Infrastruktur (PT SMI) and PT Indonesia Infrastructure Finance (PT IIF) in the process to be accredited as NIE by the GCF. At the time of writing, PT SMI has completed all the requirements demanded by the GCF’s accreditation panel after a year of hard work to fulfill all the requests, while PT IIF is still at the initial stage but has been able to prepare some project proposals using the GCF’s project concept note template.

The project of supporting the establishment of the NDA will end in December 2016. I believe with a good team in place, this project will result in numerous subtansial recommendations for the Ministry of Finance to establish strong foundations for an NDA that is legitimate and capable to carry its expected roles.