Cablegate: Indonesia Launches Climate Change Trust Fund

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PP RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJA #1552 2590604
ZNR UUUUU ZZH
P 160604Z SEP 09
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC PRIORITY 3340
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS COLL
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUEHRC/USDA FAS WASHDC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHBR/AMEMBASSY BRASILIA 0226
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RUEHCP/AMEMBASSY COPENHAGEN 0112
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RUEHBY/AMEMBASSY CANBERRA 3660
RUEHUL/AMEMBASSY SEOUL 5408
RHEHNSC/NSC WASHDC

UNCLAS JAKARTA 001552

SIPDIS

E.O. 12958: N/A
TAGS: EAID KGHG SENV PREL ID
SUBJECT: Indonesia Launches Climate Change Trust Fund

1. On September 14, Indonesia's Ministry of National Development
Planning announced the "soft" launch of the Indonesia Climate Change
Trust Fund (ICCTF). Through the ICCTF, the Government of Indonesia
(GOI) aims to achieve a low-carbon economy with greater resilience
to climate change and to link international sources of financing
with national investment strategies. The ICCTF's main mitigation
priority areas are the energy sector and sustainable management of
forestry and peat lands. The adaptation priority areas are
agriculture, water resources and coastal zone management (including
fisheries). The GOI moved up the ICCTF launch announcement in
advance of this month's rapid series of high-level climate change
talks, starting with the Major Economies Forum meeting in Washington
and culminating in the Pittsburg G20 Summit.

2. The GOI sees the ICCTF as the means to finance its Nationally
Appropriate Mitigation Actions (NAMAs). A 20 Year Climate Change
Sectoral Roadmap will provide the basis for developing Indonesia's
NAMAs. Together with Indonesia's 2010-2014 Medium Term Development
Plan, this Roadmap will, when finalized, guide ICCTF's activities.
The GOI aims to complete the Roadmap by October at the earliest, but
no later than December's climate change negotiations in Copenhagen.

3. It was a "soft" launch because the ICCTF's structure, mechanisms
and policies are not yet fully defined. The United Nations
Development Program will serve as the interim Trustee until a
"national financial institution" is appointed by the Ministry of
Finance through a fair and open bidding process. The timing of the
ICCTF launch caught donors by surprise. However, the United Kingdom
re-pledged an existing commitment of 10 million pounds. Australia
has also pledged AUS$2 million for the first year of ICCTF
activities. Norway has similarly pledged an initial 1 million
Euros. In its first phase, the ICCTF will have an Innovation Fund
mechanism that operates solely with grant funding from development
partners and other contributors. From 2012 onwards, the ICCTF will
shift to a Transformation Fund mechanism that will accept multiple
sources of financing -- public and private -- in addition to
grants.

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