Since 2018, the Green Climate Fund (GCF) has supported the Government of Indonesia, in enhancing their capacity to access international climate funds and achieve various climate goals.

This support is provided through the Readiness and Preparatory Support Program (Readiness Program) with GGGI as its delivery partner. The Readiness Program accessible by the National Designated Authority (NDA) as the focal point between the GCF and respective countries. Indonesia’s NDA, the Fiscal Policy Agency of the Ministry of Finance, has utilized this grant facility to strengthen national stakeholders’ capacity, boost the NDA’s institutional capacity, and offer additional technical assistance to improve Indonesia’s readiness for accessing climate finance. Set to run until 2025, the GCF Readiness Program Phase 3 is Indonesia’s first multi-year readiness program, with GGGI continuing to serve as the program’s delivery partner.

During the first two phases of the Readiness Program, the NDA has strengthened its institutional capacity by establishing the NDA Secretariat, developing monitoring and evaluation tools, and providing training for NDA staff. The program implementation and stakeholder engagement have also incorporated mainstreaming gender and social inclusion principles. The NDA also successfully developed national project pipelines by identifying potential project ideas and facilitating matchmaking between project proponents and accredited entities. This led to the approval of the Korea Development Bank’s energy efficiency financing project, in collaboration with the ASEAN Centre for Energy, at the GCF 34th board meeting. Further support from the Readiness Program includes the accreditation process for national entities.

Despite improvements in Indonesia’s readiness to access GCF funding through the Readiness Program, capacity gaps among stakeholders still need to be addressed, particularly in adhering to global standards. Therefore, to pinpoint the remaining challenges and necessary support, the NDA conducted a Readiness Needs Assessment, which formed the basis for developing the Readiness Program Phase 3.

The Readiness Program Phase 3 proposes several integrated solutions, outcomes, and activities to address these challenges. Through the program, NDA aims to balance funding allocation between priority sectors by reinforcing stakeholder coordination, especially between ministries, institutions, and climate finance focal points. The NDA also seeks to further strengthen project pipeline development in priority sectors by encouraging proposal submissions from national Direct Access Entities (DAEs) and building the capacity of DAEs and DAE candidates. Lastly, to stimulate private sector involvement, the NDA will devise various recommendations for blended financing facilities and appropriate fiscal incentives to attract private investments.