Jakarta, 11 December 2023 — The Environmental Fund Management Agency (BPDLH) and the United Nations Development Programme (UNDP) have launched the Catalytic Funding Program and the Incentivizing Mitigation Outcomes Program as part of Indonesia's commitment to; 1) combating environmental issues and climate change through the Nationally Determined Contribution (NDC), 2) meeting sustainable development targets (SDGs), 3) accelerating the scale of impact achieved by all businesses conducted by startups under the Indonesia Impact Fund (IIF), and 4) supporting the carbon pricing ecosystem in Indonesia.
The launch event took place at the Mezzanine Hall of the Ministry of Finance of the Republic of Indonesia, attended by Deputy Minister of Finance, Suahasil Nazara, Resident Representative of UNDP Indonesia, Norimasa Shimomura and Ueda Hajime, Minister of Economic Affairs, Embassy of Japan to the Republic of Indonesia.
“Realizing the SDGs and Net Zero requires a participatory approach from all sectors, both public and private. So far, business activities are often considered only pursuing growth but not thinking about environmental and social impacts, so the Environmental, Social and Governance (ESG) framework emerged. This Catalytic Fund program is the first step in BPDLH's commitment to accelerate sustainable development targets and involve relevant ecosystem actors such as startups in implementing best practices and impact investment initiatives with innovative approaches in driving ESG through public-private partnerships,” said Joko Tri Haryanto, President Director of BPDLH.
ESG-based sustainable financing is applied in Indonesia through various innovative funding instruments and schemes. The Catalytic Funding program aims to increase and accelerate the impact contribution of BPDLH investments in achieving sustainable development targets. The program engages startups supported by IIF's portfolio to implement large-scale beneficial impact solutions by expanding their business activities to high-risk areas, underserved regions, or vulnerable population groups, including coastal communities and 3T areas (tertinggal, terdepan, dan terluar). UNDP plays an active role as a strategic partner of BPDLH, providing both funding and technical assistance to support sustainable impact measurement and management.
"One of the opportunities to mainstream ESG in Indonesia's development is the implementation of blended finance that will accommodate the involvement of the financial services industry, private sector, and philanthropists in infrastructure financing in Indonesia," continued Joko Tri Haryanto.
Effective implementation of sustainable finance requires active engagement and cooperation with various parties including the financial sector, private sector, philanthropy, and multilateral institutions. On the same occasion, BPDLH and UNDP also launched the Incentivizing Mitigation Outcomes program as a step to accelerate business actors in Indonesia in implementing climate change mitigation actions. Through the Incentivizing Mitigation Outcomes program, BPDLH is fully supported by UNDP to prepare two modalities in providing incentives, namely for mitigation action managers who have prepared Dokumen Rancangan Aksi Mitigasi (DRAM) and validated by Validation and Verification Institutions, and for Sertifikat Pengurangan Emisi (SPE) Gas Rumah Kaca (GRK) owners to participate in the Indonesian Carbon Exchange (IDXCarbon) as a form of contribution to achieving Indonesia's ENDC target.
The Catalytic Funding and Incentive Mitigation Outcomes programs demonstrate the significance of involving all parties in achieving the SDGs and NDC targets. "Mutual cooperation between stakeholders is very important in our efforts to achieve the SDGs. Therefore, UNDP remains steadfast as a trusted partner of the Indonesian government so that hopefully Indonesia will become a leading country in innovative funding efforts and achieving carbon neutrality," said Norimasa Shimomura, UNDP Resident Representative.
The launch was followed by a seminar on Realizing ESG Implementation through Sustainable Financing on Climate Change Action. The seminar was divided into two discussion sessions, which discussed the impact investing landscape and blended finance opportunities in an effort to encourage impact start-ups, and discussed the implementation of carbon trading in Indonesia.The first discussion session featured Endah Tri Kurniawaty, Director of Fundraising and Development at BPDLH, Muhammad Salman, Head of Venture Funds at Mandiri Capital Indonesia, and Romy Cahyadi, Chairperson of Indonesia Impact Alliance. The second session was attended by Lufaldy Ernanda, Director of Derivative Finance and Carbon Exchange Supervision at the Financial Services Authority.
Sharyn Rahma Aulia
Badan Pengelola Dana Lingkungan Hidup