Indonesia Environment Fund: Bridging the Financing Gap in Environmental Programs

The report examines the Indonesia Environmental Fund Agency (BPDLH), established in October 2019 to bridge financing gaps for environmental protection and climate goals. By utilizing the Public Service Agency (BLU) legal vehicle, BPDLH gains flexibility in sourcing funds from both the state budget and international donors, as well as in its procurement and staffing. The document compares BPDLH to seven other fund-managing BLUs, noting that BPDLH is unique in its ability to act as a strategic hub for diverse funding mechanisms. It specifically details two initial funding windows: the REDD+ fund, which uses result-based payments and grants for various stakeholders, and the Forest Rehabilitation Revolving Fund, which provides loans to private enterprises in the forestry sector.

• The BPDLH is the first Public Service Agency (BLU) in Indonesia designed with the explicit flexibility to source funds from both the state budget and international donors, allowing it to serve as a "funding hub" for environmental programs.
• The BLU legal structure provides operational flexibility, such as allowing a mix of civil servant and non-civil servant professionals, although only civil servants can access the treasury because BLU revenue is considered state revenue.
• BLUs operate under a dual financial reporting system: they use Financial Accounting Standards (FAS) on an accrual basis for Non-Tax State Revenue (PNBP) and Government Accounting Standards (GAS) on a cash basis for consolidation with their host ministry.
• BPDLH's mandate is broad, covering Conservation Funds and Pollution and Restoration Funds across sectors including energy, carbon trade, transportation, agriculture, and marine and fisheries.
• The REDD+ funding window utilizes several instruments, including Result-Based Payment (RBP) grants, conventional grants, and carbon trade payments, targeting beneficiaries from local communities to national governments.
• The Forest Rehabilitation Revolving Fund, absorbed from the former P3H, provides conventional, revenue-sharing, or sharia loans specifically to legal entities in the plantation and forestry business.
• A comparison of seven existing fund-managing BLUs shows varying effectiveness; for example, the Cooperatives Fund successfully disbursed most of its funds, while the Palm Oil Fund (BPDPKS) allocated 70% of spending to biodiesel subsidies by 2018, limiting R&D and smallholder productivity.

APA

Mafira, T., Mecca, B., & Muluk, S. (2020). Indonesia Environment Fund: Bridging the Financing Gap in Environmental Programs. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2020/04/Indonesia-Environment-Fund-Bridging-the-financing-gap-1.pdf

Chicago

Mafira, Tiza, Brurce Mecca, and Saeful Muluk. Indonesia Environment Fund: Bridging the Financing Gap in Environmental Programs. Climate Policy Initiative, 2020. https://www.climatepolicyinitiative.org/wp-content/uploads/2020/04/Indonesia-Environment-Fund-Bridging-the-financing-gap-1.pdf.

Wikipedia

{{cite report |last1=Mafira |first1=Tiza |last2=Mecca |first2=Brurce |last3=Muluk |first3=Saeful |title=Indonesia Environment Fund: Bridging the Financing Gap in Environmental Programs |publisher=Climate Policy Initiative |date=April 2020 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2020/04/Indonesia-Environment-Fund-Bridging-the-financing-gap-1.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mafira2020indonesia, author = {Mafira, Tiza and Mecca, Brurce and Muluk, Saeful}, title = {{Indonesia Environment Fund: Bridging the Financing Gap in Environmental Programs}}, institution = {Climate Policy Initiative}, year = {2020}, month = apr, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2020/04/Indonesia-Environment-Fund-Bridging-the-financing-gap-1.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }