Indonesia to Receive Largest Amount of GEF's Climate Finance Funds

a man wearing a suit sitting on a white background
Sharm el-Sheikh, Egypt

Indonesia to Receive Largest Amount of GEF's Climate Finance Funds

Global Environment Facility (GEF) CEO Carlos Manuel Rodriguez spoke to room full of journalists on the sidelines of COP27 in Sharm el-Sheikh, Egypt. Over the next four years, the organization provides billions of dollars in grant funds collected from 35 donors to more than 160 countries in the world.

"Indonesia will receive the most grant funds. Even higher than China, Brazil, and India," Rodriguez told reporters.

Rodriguez said this is the first time Indonesia is receiving the most grant funds. The combination of natural wealth, biodiversity, and the threat of climate change makes Indonesia an eligible recipient, as the country reflects well on all of the indicators GEF use in its assessment.

In relation to climate change, GEF would normally assess Indonesia’s performance on the land use change and deforestation, but the indicators have been broadened. For example, Rodriguez explained that urban problems such as chemical pollution, plastic waste, and water have been included in the assessment as well. In addition, the transition from coal to renewable energy is also a priority.

"I have met with the Minister of Environment and Forestry [Siti Nurbaya Bakar] in January 2022. She is very supportive and I will meet with the government again in January to talk about GEF8," he said.

According to Rodriguez, Indonesia's achievements in reducing deforestation has been commendable and important. However there are other issues that needs to be addressed including plastic pollution and added that negotiations are currently underway for an international agreement to regulate the use of plastics.

According to GEF, Indonesia will receive US$103 million in grants. Of this amount, US$82 million will be focused on projects related to biodiversity. The rest will be used for climate change projects (US$ 20 million), and land degradation (US$ 1.4 million). Other recipients like China will receive US$93 million, Brazil and India will receive US$79 million and US$89 million respectively.

State coffers

The 8th round of GEF (GEF8) environmental grant funds will be provided in stages from 2022-2026. As for the mechanism, GEF will provide the funds directly to the government. Rodriguez said that GEF actually wants the organization to collaborate directly with civil society organizations (CSOs).

"The [grantee country] government doesn't like that idea. They always refuse," Rodriguez said. One of the main reasons, Rodriguez explained, is country recipients are concerned that if funds are given to CSOs, the funds they will get will decrease. Whereas according to him, the GEF considers the need for long-term and systematic investment in civil society.

"In the future we plan to increase direct funding to civil society," Rodriguez said. At COP27, the Government of Indonesia also announced that it has received an initial payment of US$ 20.9 million from the World Bank under the 'Results Based Payment' (RBP) framework. This is part of a REDD+ program in East Kalimantan, for which Indonesia will receive a total of US$110 million when the final project verification is completed.

The scheme in which these funds are being distributed to countries – grant or loan – is a huge question mark, especially in the context of loss and damage.

"Compensation for loss and damage must be in the form of grants. We [developing countries] do not accept loans," Saleemul Huq, Director of the International Center for Climate Change & Development, told Katadata.

Currently, the parties at COP27 have launched the draft document A Finance for Loss and Damage which was discussed on Monday (14/11). However, well into the last hours of the negotiations, none, or very little agreement is in sight on how the Loss and Damage funding facility will be established.

A number of developing countries that are members of the Least Developed Countries (LDCs) and Alliances of Small Island States (AOSIS) said they would not leave COP27 without an agreement on loss and damage financing.

This story was produced as part of the 2022 Climate Change Media Partnership, a journalism fellowship organized by Internews' Earth Journalism Network and the Stanley Center for Peace and Security. It was first published in Bahasa Indonesia in Katadata on 15 November 2022 and has been lightly edited for length and clarity.

Banner image: Global Environment Facility CEO Carlos Manuel Rodriguez / Credit: Katadata.

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