MINISTRY OF FINANCE

FISCAL POLICY AGENCY

CALL FOR

PROJECT
CONCEPT NOTE

Indonesia NDA GCF Secretariat

Fiscal Policy Agency - Ministry of Finance of Republic of Indonesia
R.M. Notohamiprodjo Building, 5th Floor
Dr. Wahidin No.1 Street, Central Jakarta 10710
Phone: (021)34831676
 Call for Project Concept Note

Table of Content
I. Introduction........................................................................................................................ 4
II. Objectives.......................................................................................................................... 4
III. Eligibility for Submission of the Project Concept Notes (PCNs)........................................... 5
IV. Call for PCNs Mechanism............................................................................................... 5
Annex 1: Indonesia’s Pipeline of Thematic Area.................................................................... 9
Programmatic Area 1: Energy........................................................................................ 10
Programmatic Area 2: Industrial Processes and Product Use....................................... 11
Programmatic Area 3: Agriculture................................................................................. 12
Programmatic Area 4: Land-use, land use change and forestry (including peat fires).. 1 3
Programmatic Area 5: Waste........................................................................................ 14
Programmatic Area 6: Oceans Management and Climate Change............................... 15
Programmatic Area 7: Building Resilient Livelihoods of People and Communities...... 15
Annex 2 : Cover Letter.........................................................................................................17
Annex 3 : Applicant’s Organization Profile......................................................................... 18
Annex 4 : The Concept Note.............................................................................................. 21
 Call for Project Concept Note

Invitation to submit Project Concept Notes for Green Climate Fund (GCF)
support in Climate Change Related Programs/Projects

The First Batch

3
 Call for Project Concept Note

I. Introduction
The Green Climate Fund (GCF) is a financing mechanism of the United Nations Framework Convention
on Climate Change (UNFCCC) and is specifically established to provide financial support so that countries
like Indonesia can reach its emission reduction targets. As of May 2018, the GCF portfolio has 76 projects
worldwide, worth USD 12.6 billion with an anticipated equivalence of 1.3 billion tonnes of CO2 avoided and
increased resilience for 217 million people

Indonesia has enjoyed strong and consistent economic growth of around 6% per annum over the past 15
years and the nation aims to become a high-income country by the 2030s, which will require continued
rapid economic growth. However, Indonesia is also the world’s fifth largest emitter of greenhouse gases
and the largest contributor of forest-based emissions. Therefore, Indonesia’s success in achieving this
ambitious goal will be determined by the country’s ability to deliver rapid yet inclusive and sustainable
economic growth, aligned with the national climate pledges in the Paris Agreement to reduce emissions by
29 percent financed by its own resources (unconditional commitment), and by 41 percent that is subject to
international assistance by 2030.

The GCF supports countries such as Indonesia on a paradigm shift towards a low-emission and climate-
resilient development. Both public and private entities can access GCF support with Government of
Indonesia approval through the Fiscal Policy Agency (Badan Kebijakan Fiskal/BKF). Being central to climate
change related projects/programs are best suited for availing GCF support. Accordingly, in line with
Indonesia’s Intended Nationally Determined Contributions (INDCs) under the UNFCCC, BKF, which is under
the Ministry of Finance (MOF) has plans to avail GCF resources to supplement domestic resources for
climate change programs in the country.

Accordingly, BKF which serves as the national focal point or National Designated Authority (NDA), is issuing
a first call for submissions of a Brief of Project’s Concept Note for climate related activities as projects or
programs.

BKF-MOF is calling to all stakeholders (industry, private and public institutions, NGO and other stakeholders)
to submit Project Concept Notes on possible projects and programs under your own agency, organization,
or institution. All concept notes need to be climate change related programs/projects, which can be both
mitigation and adaptation activities. This call is the first batch and there will be at least two batches for the
call in the year of 2019. As a reference for proposed program for this first batch call, Indonesia’s Pipeline
Thematic Areas have been defined and stated in Appendix 1. The pipeline thematic areas are in-line with
Indonesian Government Priority Areas in Indonesia’s Nationally Determined Contributions (NDC). In the
coming months, BKF will launch Indonesia’s updated Country Programme (CP) for GCF and after that, the
Country Program will be a reference for program/project that can be proposed for the next batches of the
Call.

II. Objectives
The objectives of this Call for Project Concept Notes (PCNs) aims to
1. Expand and strengthen Indonesia’s GCF pipeline;
2. Provide technical advisory to further strengthen the PCNs;
3. Provide matchmaking (if necessary) between the project applicants and the (Direct) Accredited
Entities.

Please be advised that the technical advisory for concept notes will only be given to a select few that
passed the first stage of the selection of every batch of the Call.

4
 Call for Project Concept Note

III. Eligibility for Submission of the Project Concept Notes (PCNs)

BKF will undertake a screening of all submitted PCNs against a set of eligibility criteria outlined below. The
PCNs submitted need to satisfy all organizational and project eligibility criteria outlined under subsection
A and B as follow:

A. Organizational Eligibility
1. The Applicant or Lead organization must be an entity legally registered in Indonesia and authorized
to conduct all activities germane to the purpose of the proposed project. Applicants and/or Lead
organization can include multinational or national corporations; international and national banks/
financial institutions; international and national NGOs, foundations, and multilateral institutions; or
trade or professional associations.
2. The Applicant and/or Lead organization must demonstrate a proven track record in developing,
managing and implementing climate change projects including renewable and clean energy
development; industrial processes and product use; agriculture; land-use, land use change and
forestry (including peat fires); waste; oceans management and climate change; livelihoods of people
and communities.

B. Project Eligibility
The projects/activities proposed by all eligible organizations must meet Indonesia’s Pipeline of Thematic
Area explained in the Annex 1. As explained in the Annex 1 of this call, the Indonesia’s Pipeline of
Thematic Areas are Energy, Industrial Processes and Product Use, Agriculture, Land-use, land use change
and forestry (including peat fires), Waste, Oceans Management and Climate Change, and Livelihoods of
People and Communities.

IV. Call for PCNs Mechanism

Figure 1. Flow of Call for PCNs

Announcement Matchmaking Submission

PCNs Assessment Technical
of selected with (D)AEs to GCF
submission process Assistance
PCNs

A. PCNs Submission
The Project Concept Note application shall include the following three documents:
1. A Cover Letter conveying the Applicant’s Interest to participate on this Call for Project Concept
Note (template in Annex 2).
2. Applicant’s organization profile, including information on applicant/lead organization, members of
consortium, if applicable (template in Annex 3).
3. The Project Concept Note outlining project rationale and objectives, technical approach, targets
and budget within the 5-page limit (template in Annex 4).
All three documents should be in English. Incomplete submission will not be considered.
• Submit the Project Concept Note in the prescribed format by sending it via email
to: [email protected]
• The email subject shall be: “PCN1_[Title of your project]”
• There will be two submission periods for the first batch of Call for PCN:
- Submission period I: June 24th, 2019 - August 23rd, 2019
- Submission period II : August 26th, 2019 - October 25th, 2019

5
 Call for Project Concept Note

B. Assessment Process
There will be two stages of assessment for submitted PCNs:
Stage I: Assessment of Organizational and Project Eligibility
• After the PCNs are submitted by the organizations to BKF, the BKF will apply a screening process
to assess whether the applicant satisfies all organizational and project eligibility criteria outlined
under section III.A and III.B.
• If the organization is deemed eligible, the PCNs will be assessed whether their it submission fits
within the Indonesia’s pipeline thematic areas (see Annex I).
• All PCNs that pass the eligibility assessment will go through Stage II of the assessment.
• The Stage I of the assessment should be completed within 15 business days upon the receipt of
submission. Both successful and unsuccessful candidates will get receive a notification regarding
the results of Stage I.

Stage II: Technical Review of the Content of Concept Note

• A technical expert advisory group established by the BKF will conduct a more detailed assessment
for the content of applicant’s PCN as outlined in Annex 4. In this stage of assessment, the content of
concept note as outlined in Annex 4 would be examined with a scoring system based on the GCF’s
investment criteria.
There are six criteria of GCF’s investment:
a. Climate impact potential;
b. Paradigm shift potential;
c. Sustainable development potential;
d. Effectiveness and efficiency;
e. Needs of recipient;
f. Country ownership.
Further explanation on the GCF investment criteria can be seen at
http://bit.ly/GCFInvestmentCriteria
• Stage II of the assessment should be completed within 15 business days upon the publication of
Stage I results.

C. Selected PCNs Announcement

After 30 business days, all stages of assessment should be completed. The result will be announced in
the same media as the Call for PCNs publication. All applicants will also receive notifications by email
regarding the results.

The workflow for PCNs assessment process and result announcement is described in Figure 2.

6
 Call for Project Concept Note

Figure 2. Flow of Assessment Process

Agencies

Sekretariat
NDA-GCF Priority Programmatic Area

A. Organizational Eligibility
B. Project Eligibility
i. The Indonesia’s Pipeline of Thematic
Area (Annex 1)

15 business days

Technical Advisory Group

Technical Evaluation

Content of Concept Note (Annex 4) based on

Investment Criteria

15 business days

Announcement

Parties in charge

Feedback and revisions

D. Technical Assistance
Applicants with PCNs that pass all stages of the assessment process will be invited by the BKF to prepare
and submit detailed concept notes based on GCF Standard. At this stage, the BKF may provide a technical
assistance to the successful applicants in preparing a detailed PCN. The technical assistance can be
expected to be in form of expert review and administrative advices.

E. Matchmaking with (D)AEs (if needed)

If the PCNs do not yet have potential (D)AE, the BKF may assist project owner in finding suitable (D)AE.
Please note that while the BKF tries to find the most suitable (D)AE for the projects, the proposed (D)AE
might have different opinion towards the projects. Therefore, the matchmaking stage is not a guarantee
that every PCN will get a (D)AE.

7
 Call for Project Concept Note

F. Submission to GCF
The last stage of the Call for PCNS is submission of the detailed concept notes following the GCF Standard
to the GCF.

Please note that there will be no restriction for applicants who may not succeed in this first Call for PCNs
to apply for the next batch of Call for PCNs.

Disclaimers
a. The Project Concept Note approval by the NDA does not give the project any assurance that
the project will be considered by any (D)AE or the GCF
b. There is possibility none of the Project Concept Note submitted will be approved by the GCF
c. The data submitted to Call for Project Concept Note will remain confidential
d. Technical advisory will be provided depending to available budget
e. The whole process is conducted in fair and transparent manner

8
 Call for Project Concept Note

Annex 1: Indonesia’s Pipeline of Thematic Area

The priority sectors identified through existing national and sectoral documents have been synthesised
into seven programmatic areas and interventions which are characteristically inter-thematic and needs
multi-stakeholder input in order to achieve the climate change policy goals where climate change action
will progress the transition of Indonesia towards a low carbon development pathway; build the resilience of
the country and people towards the impacts of climate change through a coordinated, inclusive, culturally
appropriate adaptation and mitigation measures; and affirm Indonesia as a leader in addressing climate
change.

The first five priority programmatic areas below are priority areas from Indonesia’s Intended Nationally
Determined Contributions (INDC). INDC outlines the country’s transition to a low carbon future by
describing the enhanced actions and the necessary enabling environment during the 2015 – 2019 period
that will lay the foundation for more ambitious goals beyond 2020, contributing to the concerted effort to
prevent 2-degree Celsius increase in global temperature. According to Indonesia’s First Biennial Update
Report submitted to the UNFCCC in 2016 its total GHG emissions in 2012 were estimated at 1,454 million
metric tons of carbon dioxide equivalent (MtCO2e) for the three main greenhouse gases: carbon dioxide
(CO2), methane (CH4), and nitrogen dioxide (N2O). The main contributors are land-use change and peat
fires, representing about 48 percent of the total GHG emissions, followed by the energy sector at about 35
percent.

Meanwhile, two last priority areas complement the INDC priority areas. Global warming as a result of the
effects of greenhouse gases, have an impact towards the rise of sea levels. IPCC (2007) reported that sea
levels have risen by an average of 2.5 millimeters annually. As an archipelagic country with over 80.000
kilometers of coastlines, Indonesia is very vulnerable to sea level rise. Increasing trend of sea level rise,
warmer ocean temperatures and an increase of significant wave heights are among the few examples of
what climate change may bring to Indonesia. Climate change poses a major threat to the livelihoods of
many people, especially those dependent on agriculture. Adaptation to climate change is a necessity to
reduce social vulnerabilities. The adoption of agricultural innovations presents a suitable strategy to reduce
negative impacts of increased inter-annual variability in rainfall and temperature.
1. Energy
2. Industrial Processes and Product Use
3. Agriculture
4. Land-use, land use change and forestry (including peat fires)
5. Waste
6. Oceans Management and Climate Change
7. Livelihoods of People and Communities

The priority programmatic areas are underpinned by the following pillars:

A. Promoting gender responsive, participatory and transparent low carbon and climate resilient
development pathways.
B. Developing resilience through climate proofing key productive sectors, while improving human
wellbeing and ecological integrity through sustainable livelihoods, food, water, energy security and
opportunity creation using a cohesive approach.
C. Encouraging participation of the private sector, civil society and communities to complement government
and climate finance partnerships in mobilising resources and implementing climate change initiatives.
D. Integrating climate information in decision making at all levels.

9
 Call for Project Concept Note

Priority Programmatic Areas

This section outlines specific interventions in each key sector that climate finance can support to build
resilience in Indonesia. It should be noted that there are inter-linkages and crossovers between programmatic
areas reflecting the multifaceted nature of addressing the impacts of climate change in the context of
people-centered development. It should also be noted that the elements of the programmatic areas will
be reviewed annually. This will ensure their impact, paradigm shift and sustainable development potential,
how they are responding to the country’s and community’s needs, and the actual and potential efficiency
and effectiveness in delivery. These programmatic areas and elements, have been identified by the people
and therefore the means of implementation have to compliment the ability to achieve what has been set
out in this strategy, including the support from development partners. The majority of these programmatic
areas and element of the programmes also builds on existing work that is ongoing nationally, within sectors
and in communities whether funded by the government, development partners, the private sector, CSOs
and communities themselves.

Programmatic Area 1: Energy

In Indonesia, the country’s National Energy Plan aspires to transform the energy mix by 2025 to 20 percent
coal, 23 percent renewable resources, 25 percent natural gas and 22 percent oil. Indonesia, therefore, is
still set to produce its largest amount of power from coal for the foreseeable future, whereas renewables
are targeted to account for 23 percent of generation – despite many having expressed pessimism that this
could actually be achieved given the current energy policy landscape.

Indonesia is competing with other growing nations for energy investments. Indonesia’s recent history of
frequently changing energy policies has put the country at a disadvantage with international investors
looking at multiple country level investment environments. By taking the step to acknowledge the negative
health/environmental impacts and indirect costs fossil fuels impose on societies, Indonesia could find new
justification for creating fair and balanced power tariffs and focused incentives to help the country put a
solid foundation under the RE sector.

Examples GCF Strategic Impact Areas

Expand renewable energy such as PV solar, wind, • Low emission energy access and power
biomass, geothermal, hybrid system and other generation;
relevant electricity generation sources with a focus
on tried and proven technologies
Improve renewable energy storage capacity • Low emission energy access and power
generation;
Implement energy efficient businesses and • Low emission energy access and power
households generation;
Implement energy efficiency in public buildings • Energy efficient buildings;
Scaling Up energy Efficiency for Industrial • Energy efficient industries
Enterprises
Scaling Up Investment in Low Carbon/Green • Energy efficient buildings
Buildings
Climate proof energy infrastructure through • Low emission energy access and power
the integration of climate change risks and generation;
opportunities in the design, operation and • Resilient infrastructure and built environments
management of infrastructure to climate change threats;
• Energy efficient buildings, cities and industries

10
 Call for Project Concept Note

Examples GCF Strategic Impact Areas

Promote the use of electric vehicles and other • Low emission transport
forms of transformation
Explore and implement means to incentivise • Low emission energy access and power
the uptake of renewable energy, including the generation;
implementation of cheaper financing options for • Low emission transport;
the private sector, households and communities

Programmatic Area 2: Industrial Processes and Product Use

The industrial sector is the sector that currently contributes most to Indonesia’s annual GDP growth. The
two most important sub-sectors of industry are mining and manufacturing, both being major pillars of
the nation’s economy since the 1970s, thus being engines of economic change and development during
Suharto’s New Order regime. Although the manufacturing sub-sector has lost its momentum after the
Asian Crisis of the late 1990s, it still constitutes the most popular sub-sector of Indonesia in terms of foreign
direct investment (FDI), followed by the mining sub-sector.

The risks associated with industrial development include higher pollution levels, overuse of natural
resources and increased amounts of waste and waste water posing a threat to ecosystems. Pollution caused
by hazardous substances from industry (such as waste, waste water and emissions) and the overuse of
natural resources puts sustainable development at considerable risk.

The Indonesian Government has made a clear commitment to achieving industrial growth while also
protecting the environment. At the same time, the private sector is increasingly interested in adopting
modern processing techniques for clean and resource-efficient industrial production. Moreover, Indonesian
customers’ growing understanding to better consume eco-labelled products and also the growing number
of producers to produce eco-labelled products have marked Indonesian markets’ readiness to apply
environment-care production practice. A survey result conducted by WWF-Indonesia and Nielsen in July
2017 showed that 63% of Indonesian consumers are willing to take eco-label products despite the difference
in price. The survey was conducted on 916 respondents of 15 to 45 years in Jakarta, Medan, Surabaya,
Denpasar, and Makassar representing the middle-up consumers.
Examples of project activities might be grouped into the following areas:
• environment-oriented modernization of three industrial areas (showcasing solutions)
• establishing conducive conditions at the national and state levels
• knowledge management and dissemination

These activities will focus on the conveyance, treatment, recycling and reuse of waste water, the management
of sewage sludge, monitoring systems, and improving processes in individual industries. The measures will
be complemented by training and skills development, as well as the creation of a virtual platform for the
exchange of best practice technologies.

The activities will also support efforts to establish an enabling framework at central and state levels. To
this end, there will also be new measures for the policies, plans and support programmes intended to
prevent or reduce pollution and to improve resource efficiency in industrial zones. Actors, such as industry
associations, industrial site operators and private companies, as well as relevant entities at the central and
state levels, are all encouraged to get involved in the project at various stages.

11
 Call for Project Concept Note

Programmatic Area 3: Agriculture

To achieve food security, ecosystems must continue delivering a variety of benefits that are crucial for
crop, livestock, forest and aquatic production systems as well as rural livelihoods. Productivity therefore
depends on ecosystem functioning, and the healthy functioning and resilience of ecosystems depends - to
a great extent - on biological and genetic diversity. However, biodiversity and ecosystem functioning will
be affected by climate change in addition to existing pressures, such as land-use change and introduction of
invasive species. Ecosystem-based adaptation (EBA) has been defined as an overall strategy that integrates
the use of biodiversity and ecosystem services to help people adapt to the adverse impacts of climate
change. It includes the sustainable management, conservation and restoration of ecosystems to provide
services that help people adapt to both current climate variability, and climate change.

With the predictions of more adverse impacts of climate change, these effects will become more acute
on the livelihoods of people and communities, food security and the ability of ecosystem services to fulfil
their purposes. Impacts experienced are reduced agricultural production, changes in the suitability of land
for crop production, availability of water, changes in the duration of growing seasons, lower yields, loss
of income, increase in negative coping mechanisms, and instability of food supply, reduced nutrition and
wellbeing. This is exacerbated by human actions, such as land clearance and overuse, intensive agriculture
and unsustainable agricultural practices. These actions contribute to land degradation, water insecurity
and erosion.

Examples GCF Strategic Impact Areas

Strengthen climate change and agriculture • Enhanced livelihoods of people and
individual and institutional capacities of improved communities;
ecosystem management, including: defining • Increased health and well-being, and food and
guidelines for sustainable land development water security;
(incorporating the use of taro wetlands) and • Resilient ecosystems;
climate smart agriculture; mapping specific areas • Sustainable land use and forest management;
for specialised use; disseminating climate and
agriculture information to communities; and
training and outreach.
Single and/or multiple commodity value chain • Sustainable land use and forest management;
projects aimed at im¬proved agriculture practices, • Enhanced livelihoods of people, communities,
marketing and certification practices that promote and regions;
increased on-farm incomes, improved community • Increased health and well-being, and food and
nutrition, sustainable production (on existing land water security;
under production) and reduced GHG emissions • Resilient ecosystems
(e.g. cocoa, coffee, oil palm, rubber, spices, protein
rich food grains such as soybeans and legumes,
timber, non-timber forest products)
Strengthen sustainable agriculture including: • Enhanced livelihoods of people and
improving water supply and irrigation; increasing communities;
planting of climate resilient crops; scaling up of • Increased health well-being, food and water
climate resilient and organic farming practices; security;
improving conservation, processing and marketing • Resilient ecosystems;
of farm productions; organising producer
groups and facilitating partnerships; creating
and enhancing income generating activities for
farmers, provision of protein-rich products for
improved household nutrition security.

12
 Call for Project Concept Note

Examples GCF Strategic Impact Areas

Implement alternative agriculture technologies • Enhanced livelihoods of people and
including greenhouses, hydroponics, etc. communities;
• Increased health well-being, food and water
security;
• Resilient ecosystems;

Programmatic Area 4:
Land-use, land use change and forestry (including peat fires)
Indonesia has the world’s third largest tropical forest after the Amazon and Congo Basin rainforests and has
one of the world’s highest rates of deforestation and forest degradation. Land-use activities are the primary
drivers of greenhouse gas emissions in Indonesia in recent decades, making up at least 62 percent of total
emissions (INDC, 2016). Land-use sector policies included in the two mitigation scenarios are the forest
moratorium policy, the peat restoration, land and forests restoration, and social forestry targets.

In addition, Indonesia possesses the world’s largest area of tropical peatlands, covering 14.6 million
hectares (MoEF, 2015). These peatlands are under serious threat because they are being converted to oil
palm concessions, pulp and paper plantations, and other commercial uses. When peatlands are drained to
be converted, the peat decomposes and releases carbon dioxide into the atmosphere. One study estimated
that peat fires accounted for 23 percent of Indonesia’s total emissions in 2010 (BAPPENAS, 2015).

While the social forestry scheme was designed to facilitate community access to natural resources and enable
people-centred development, it has the potential to promote forest restoration. For years, unsustainable
forest management practices and the conversion of forestland for commercial uses have decreased forest
cover in Indonesia. Through the social forestry scheme, communities have the responsibility to manage their
forests and the potential to better maintain forest cover since their economy relies on forest conservation.

Examples GCF Strategic Impact Areas

Agroforestry (e.g trees along border (TAB), • Sustainable land use and forest management;
increasing land use pro¬ductivity through • Enhanced livelihoods of people, communities,
integration of woody species with agricultural and regions;
system, non-timber forest products (NTFPs)). • Resilient ecosystems

Ecosystem protection or recovery, including peat • Resilient ecosystems

land restoration, rehabilitation of riparian zones • Sustainable land use and forest management;
and wetlands, integrated mangrove protection,
and coastal management related to upstream
deforestation.
Promote reforestation and protecting soil against • Enhanced livelihoods of people and
erosion with activities including: replanting of communities;
native and fruit trees; improving land-use practices • Increased health wellbeing, food and water
and rehabilitation of degraded lands. security;
• Resilient ecosystems;
• Sustainable land use and forest management.
Forest conservation, community forestry, and • Sustainable land use and forest management;
sustainable forestry management, including
timber and non-timber forest products (NTFPs)
production and marketing.

13
 Call for Project Concept Note

Examples GCF Strategic Impact Areas

Other peatland natural resource management • Enhanced livelihoods of people and
(NRM) activities that support low-carbon economic communities;
growth through improved management of critical • Increased health well-being, food and water
ecosystems and enhanced livelihood opportunities security;
for surrounding communities. Examples include • Resilient ecosystems;
agro-tourism or community-managed ecotourism
projects

Programmatic Area 5: Waste

By producing 3.2 million tons of plastic waste in 2014, Indonesia is now one of the world’s largest plastic
waste producers. Over 1.3 million tons of this plastic ends up in rivers and oceans with poor waste
management strategies, making Indonesia the world’s second largest marine plastic polluter as well. The
government of Indonesia has committed to maximising its efforts to resolve the country’s waste issue.
Especially for marine debris, the Indonesian government aims to have a 70% decrease in waste by 2025.
Most importantly, the government also encouraged the public to implement waste management routines
and strategies at home such as recycling and decrease of plastic use.

The supply of household waste is projected to grow in concert with commercial activity and opens the
door to the establishment of waste-to-energy power plants. The government’s ongoing process of weaning
the country off fossil fuels necessitates a growing dependence on renewable energy and Indonesia has
increasingly looked at the success of byproduct-fueled power generation in regional neighbours as a
template for success.

Indonesia also presents opportunities in a composting industry now more attractive due to an increasing
awareness amongst the general public of the need to separate organic from inorganic waste. Initiatives
from local governments and private sector players to introduce the concept of waste banks -- in which
households separate their waste into different containers and then deposit non-organic solid waste at
a collection point in their neighbourhood in exchange for money that can be kept in an account at the
waste bank or withdrawn – have had a substantial impact across the country in educating consumers and
changing their behaviour.

Other opportunities include catering to a medical industry poised to produce more waste as a result of
Indonesia’s universal healthcare scheme introduced in early 2014. Demand for international standard
sterilization services and specialised transportation, incineration and landfill facilities are projected to reach
unheralded levels as the country’s healthcare market doubles in size between 2012 and 2018 to reach
$60.6 billion USD. When approaching an Indonesian healthcare sector still heavily reliant on public sector
facilities to serve the lower and middle class segments of the population, foreign investors are best served
working with companies that have an established customer network of public health clinics and hospitals.

Indonesia’s concerted efforts to move up the value-added chain will also create bright prospects in
providing waste management services to downstream industries that produce waste requiring specialised
disposal or recycling processes. Mineral processing, for example, produces waste in the form of tailings;
a slurry comprised of excess water and chemicals added during ore treatment that demands special care
in preventing uncontrolled release into the environment. Companies with expertise in advanced storage
techniques, such as the use of geotextile containers that dewater said slurry and facilitate the waste
being stored as a solid, are encouraged to enter the market at a time when traditional methods of waste
disposal in Indonesia such as storage in on-site bodies of water have been found to negatively impact

14
 Call for Project Concept Note

the environment. With that said, foreign investors are advised to wait for the impending release of the
aforementioned revision to waste management regulations, as the new categorizations of B3 waste may
entail mandatory management and disposal processes specific to each waste type.

Programmatic Area 6: Oceans Management and Climate Change

The problems in coastal area related with climate change have continued to receive a high level of attention.
Elevating average of sea levels, variations in significant wave height and increased ocean temperatures are
linked to global climate in many ways. Thus, climate variability and future climate change should become
a major interest for engineers, stakeholders, and decision makers, especially for developing strategies
for mitigation and adaptation for future coastal development. It is also important that the government
promotes the rehabilitation planning and management of coral reefs. The government should also seek
to continue strengthening water resource management to promote water availability in the event that it
becomes contaminated by pollutants.

As the world’s largest archipelagic state, Indonesia has more than 17,500 islands with over 81,000 kilometres
of coastline. Indonesia’s archipelago contains almost 20 percent of the world’s coral reefs. Because these
reefs house 90 percent of the fish caught by coastal fishers, they are vital to the maintenance of millions
of the country’s jobs. However, unsustainable and destructive fishing practices have made fisheries in
Indonesia less productive, resilient, and sustainable, threatening the national economy. Thus, all activities in
the coastal and ocean, such as marine transportation, offshore industry, naval industry, resource extraction,
fishing and tourism become an important part of Indonesia’s economic growth. Increasing trends of sea
level rise, warmer ocean temperatures and increased of significant wave heights are among the few
examples of what climate change may bring to Indonesia. These problems should receive serious attention
from the government to develop adaptation and mitigation plans for future development associated with
coastal areas. Fostering environmentally sustainable practices on and off the water is critical, and requires
commitment across many sectors including industry, research, non-profits, and the sailing community.

Examples GCF Strategic Impact Areas

Improve information on ocean biodiversity, • Resilient ecosystems;
particularly the deep ocean, including improved • Enhanced livelihood of people, communities
information management systems and regions;
Establish a process of marine spatial planning, • Resilient ecosystems;
surveillance and review. • Enhanced livelihood of people, communities
and regions.
Building human resources capacity for ocean • Resilient ecosystems;
management including capacity in the private • Enhanced livelihood of people, communities
sector to achieve tourism accreditation and regions;

Programmatic Area 7: Building Resilient Livelihoods of People and Communities

Indonesia is known as having a ‘supermarket’ of disaster hazards. Over the past twenty years alone, the
Indonesian government recorded over 24,000 disaster events that caused 190,500 fatalities, displaced
almost 37 million people, and damaged over 4.3 million houses. The combined losses of these disasters
totalled to almost $28 billion, or around 0.3% of national GDP annually (World Bank, 2018). Accordingly,
government institutions and non-government organizations alike in Indonesia have recently been keen on
developing community-based initiatives to build the resilience of people living in hazard-prone areas in the
country. These initiatives may take many forms, from providing a simple warehouse, emergency logistics
and two-three days emergency response trainings, to the whole process of engaging community members
in risk mapping and other risk reduction and preparedness activities, and eventually formulating village
disaster management regulations and/or plans. Issues related to community resilience became more

15
 Call for Project Concept Note

popular after the Indian Ocean Tsunami hit Aceh, Indonesia in 2004.

The key characteristics of building resilience in the Indonesian context is to ensure that the government,
private sector, communities and households have the ability to adapt to changes, anticipate what might
happen next and absorb shocks when they do come along. With more frequent dry periods, stronger storms,
creeping sea level rises, changes in agriculture productivity and the marine environment, it is essential that
families, communities and the private sector can manage and improve their ability to bounce back. It is
important to build the adaptive capacity to reduce the impact of future hazards.

During private sector and community consultations for the development of the Green Climate Fund Country
Programme, people have indicated that one of the hindrances to building their resilience to climate change
as well as investing in mitigation is the lack of and cost of funding. Funding availability either through
grants, cheaper financing and enabling policies such as tax breaks will assist people to build resilience.

Examples GCF Strategic Impact Areas

Establish funding mechanism(s) to support • Enhanced mitigation and adaptation capacities
mitigation and adaptation actions for communities, of people and communities
private sector and households
Explore and implement incentive programmes • Enhanced capacity for building resilient
to increase private sector and communitiy livelihoods of people and communities,
participation in mitigation and adaptation actions ecosystems and ecosystem services

16
 Call for Project Concept Note

MINISTRY OF FINANCE
FISCAL POLICY AGENCY

Indonesia NDA GCF Secretariat

Fiscal Policy Agency - Ministry of Finance of Republic of Indonesia
R.M. Notohamiprodjo Building, 5th Floor
Dr. Wahidin No.1 Street, Central Jakarta 10710
Phone: (021)34831676
17