ndonesian government is preparing an initial fund of Rp2.1 trillion (US$148.93 million) for the Environmental Fund Management Agency which was officially launched today (10/09) - Photo by TheInsiderStories

JAKARTA (TheInsiderStories) – Indonesian government is preparing an initial fund of Rp2.1 trillion (US$148.93 million) for the Environmental Fund Management Agency which was officially launched today (10/09). The funds will be used in the fields of forestry, energy and mineral resources, carbon trading, environmental services, industry, transportation, agriculture, marine, and fisheries.

“The initial balance of the agency’s principal fund is Rp2.1 trillion and with a cumulative commitment of Rp2.2 trillion, so we need to add new managed funds which we will later combine,” Finance Minister Sri Mulyiani Indrawati told reporters in Jakarta.

The minister explained the mainstreaming of climate change issues in the national development program has been and will continue to be carried out so that environmental and climate change issues are expected to be part of national development planning and implementation.

“Based on climate budgeting tagging conducted by Finance Ministry, there was an increase in state budget support in national programs related to climate change issues, amounting to Rp72.4 trillion in 2016 (3.6 percent), Rp95.6 trillion in 2017 (4.7 percent) and Rp109.7 trillion in 2018 (4.9 percent),” she noted.

Indrawati went on by saying that the government has a target in achieving its commitment to reduce emissions in the Nationally Determined Contribution of 29 percent on its own and 41 percent with international support.

For this reason, the government’s commitment to environmental protection and management is realized through the amount of the budget allocated for environmental management. Also, funding from developed countries related to environmental protection and management grows in line with the need for environmental funding in developing countries in line with the implementation of the Paris Agreement.

“We need to continue to maintain and develop a development strategy for how Indonesia can grow tall, how poverty is tackled, equitable development occurs throughout the islands and remote areas of Indonesia,” she said.

“However, our commitment to being able to reduce carbon emissions by 29 percent with endless efforts and 41 percent with international cooperation can still be done. This is a challenge for all of us, both in government, business and private sectors and the other stakeholders,” she adds.

Therefore, the agency is expected to prioritize accountable fund management with international standard governance, so it can be a solution for developed countries to provide funding.

The agency is regulated through Finance Minister Regulation PMK No.137/PMK.01/2019, which is the mandate of Government Regulation No.46/2017 concerning Environmental Economic Instruments and Presidential Regulation No.77/2018 concerning Management of Environmental Funds.

“The existence of the agency can accelerate the operation of public service assistance for forest development financing that has been running in the past three years. Currently, there is no scheme for sharing the percentage of funds channeled for forestry and environmental recovery,” said Minister of Environment and Forestry, Siti Nurbaya Bakar.

It said the agency will be chaired by the president director with equipment consisting of the director of finance, general and information systems; director of fund collection and development; director of fund distribution; director of law and risk management; and internal audit unit.

Then, in carrying out its duties and functions, the agency must have an effective and efficient working relationship system between internal organizational units and related agencies. It said the agency is subordinate to and responsible to the minister of finance through the director-general of the treasury.


Written by Lexy Nantu, Email: lexy@theinsiderstories.com