Inclusive Climate Finance: Improving Access for Marginalized Populations in Indonesia

The report finds that Indonesia's climate finance is dominated by a top-down approach favoring large-scale energy projects, leaving marginalized groups with limited access. While philanthropic funds target these groups, they are insufficient in scale. The authors argue for a blended finance approach and specific 'enablers'—such as capacity building and policy reform—to shift from purely philanthropic to more commercial financing for social impact.

• Indonesia's public climate finance is heavily skewed toward the energy sector, with adaptation receiving the least funding. Adaptation finance increased in 2018 and 2019, but by 2019 it only accounted for 35.2% of total public climate finance.
• Private climate finance in Indonesia is dominated by renewable energy, which represents 53.3% of total private flows, primarily driven by geothermal and hydro projects. Other significant areas include land use (13.6%), sustainable transport (13.1%), and water/wastewater infrastructure (6.9%).
• International climate finance to Indonesia is primarily commercial-driven, with loans making up 66% of flows. Grants are the least common instrument (4%) and are mostly directed toward adaptation and Agriculture, Forestry, and Land Use (AFOLU).
• Marginalized populations face significant structural barriers to accessing finance, including a mismatch in financial appetite where commercial providers prioritize high financial returns over the high social returns typical of small-scale marginalized projects. Other barriers include rigorous donor standards and a lack of fiduciary capacity among beneficiaries.
• Philanthropic funds are the most suitable for marginalized groups due to their focus on social impact and small-scale projects, but they are insufficient and fluctuate in trend. The report suggests a blended finance approach combining philanthropy, government, and private sectors to scale impact.
• There is a critical gap in capacity development and monitoring for local communities. Marginalized groups lack technical support for data collection and project planning, and tracking fund flows at the local government level remains challenging.

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} }