Inclusive Climate Finance: Improving Access for Marginalized Populations in Indonesia

This report by the Climate Policy Initiative and Yayasan Humanis dan Inovasi Sosial analyzes the climate finance landscape in Indonesia, specifically focusing on the structural barriers that prevent marginalized populations from accessing funds. It argues that current top-down approaches prioritize financier agendas over local needs and recommends a shift toward blended finance and targeted capacity building to ensure an equitable energy and climate transition.

• Indonesia's climate finance is characterized by a top-down approach that often prioritizes the agendas of bilateral and multilateral financiers over the actual needs of local marginalized communities.
• Public climate finance in Indonesia is heavily skewed toward the energy sector, while adaptation efforts receive the least funding. Adaptation finance accounted for only 35.2% of total public climate finance in 2019.
• Private climate finance is dominated by the renewable energy sector, which represents 53.3% of total private climate finance, primarily driven by geothermal and hydro projects.
• International climate finance flows to Indonesia are primarily commercial and debt-driven, with loans averaging USD 1,606 million annually, while grants are the least common instrument, averaging USD 107 million.
• Marginalized groups face significant structural barriers to accessing finance, including a lack of technical capacity to meet rigorous donor standards, a mismatch in financial appetite where financiers prioritize large-scale projects with high financial returns over small-scale projects with high social returns, and unfavorable regulatory environments.
• Philanthropic funds are a critical catalyst for small-scale projects targeting marginalized groups, but their limited size and fluctuating trends (ranging from USD 12.6 to 24.1 million between 2015-2020) necessitate a blended finance approach to scale impact.
• There is a critical gap in monitoring and evaluation at the local level, making it difficult to track the socioeconomic impacts of climate finance on the most vulnerable populations.

APA

Tjakranegara, A. I., Winarsa, S., Wijaya, E., Nurfitriani, F., & Saio, R. (n.d.). Inclusive Climate Finance: Improving Access for Marginalized Populations in Indonesia. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2024/03/Indonesia-Inclusive-Climate-Finance-Study-2023-CPI-Indonesia.pdf

Chicago

Tjakranegara, Arti Indallah, Sandra Winarsa, Ery Wijaya, Fatiha Nurfitriani, and Rindo Saio. Inclusive Climate Finance: Improving Access for Marginalized Populations in Indonesia. Climate Policy Initiative, n.d. https://www.climatepolicyinitiative.org/wp-content/uploads/2024/03/Indonesia-Inclusive-Climate-Finance-Study-2023-CPI-Indonesia.pdf.

Wikipedia

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BibTeX

@techreport{tjakranegarandinclusive, author = {Tjakranegara, Arti Indallah and Winarsa, Sandra and Wijaya, Ery and Nurfitriani, Fatiha and Saio, Rindo}, title = {{Inclusive Climate Finance: Improving Access for Marginalized Populations in Indonesia}}, institution = {Climate Policy Initiative}, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2024/03/Indonesia-Inclusive-Climate-Finance-Study-2023-CPI-Indonesia.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }