8 An Indonesian Ministry of Finance CPI Report
Landscape of Climate Finance Buchner et al. 2011a, domestic government budget plays a
central role in national landscapes of public inance, and we therefore explore in detail how
budget is distributed within the
Indonesian Landscape;
• Disbursement channels. These are the
organizations and mechanisms used to implement climate inance in Indonesia.
Within Indonesia they are sometimes known as implementing agencies, and include central
and local government agencies, state-owned enterprises, national or international non-
governmental organizations NGOs, and private actors; and
• Uses. This category refers to 1 the sectors
receiving climate inance, including both mitigation and adaptation activities; and 2
whether the spending contributes directly to emission reductions and climate resilience
outcomes through projects on the ground, or indirectly, by supporting the development of the
frameworks and capacity essential to underpin action including policy development, research
and development, establishment of measuring, reporting and veriication systems, and other
enabling environments.
2.2 The scope of the Indonesian Landscape
This study provides a snapshot of the magnitude and nature of public climate inance in Indonesia as it was
in 2011 - the latest possible year where comparable disbursement data was reliably available from public
data sources at the international, national, and local levels covered by the study. It will be important going
forward to track annual disbursements and expenditure on an ongoing basis, so that trends can be analyzed, and
anomalies can be understood.
The data in this report represents 2011 expenditures, inancing and disbursements rather than cumulative
pledges or commitments.
8
For government expenditure, we use realized not budgeted expenditure data on
a cash, not accrual, basis. Likewise, we only capture primary investment lows, movements of inance
8 Low-cost debt is captured as gross, and not net lows, due to diiculties calculating the latter.
Box 1: Climate-speciic inance: a summary of sectoral coverage
Mitigation Includes climate-speciic inance associated with renewable energy, energy eiciency demand side,
energy transmission and distribution lines, agriculture and livestock management, forestry and land use, transport modes resulting from modal shift, waste and waste water, industry process emissions
only, fugitive emissions; and
Excludes climate-relevant inance associated with large hydro, fuel switching to less carbon intensive fossil fuels,
1
road network expansion for traic reduction, supply-side energy eiciency, e.g. eiciency improvements to fossil fuel ired power plant. We also exclude manufacturing and RD costs for energy
technologies due to the risk of double counting total investment igures and embedded value chain costs.
Adaptation Includes agriculture and livestock management, forestry and land use, infrastructure and coastal
protection, and disaster risk management. See Annex B for a more detailed list of activities.
1 Activities such as fuel switching are important policies to support Indonesia’s transition to a green economy in the short and medium term. While
acknowledging their importance in a transitioning to a low-carbon economy see Box 5 ‘Indonesian policy incentives for climate mitigation and adap- tation’, CPI’s deinition of climate inance excludes ‘climate-relevant inance’, including fuel-switching, because it may contribute to emissions and also
because of diiculties related to calculating emissions baselines. While we expect a signiicant amount to be spent on such activities, we were not able to quantify the low since we did not receive any feedback during our bilateral consultations.
9 An Indonesian Ministry of Finance CPI Report
between actors,
9
and grants that were disbursed in 2011. By focusing on how much inance actually lowed, rather
than how much was planned or promised, we aim to identify any blockages in the system. We do not capture
previous years’ movements of inance, commitments or pledges, through funds or otherwise.
Throughout this study we limit the scope of our analysis to public climate inance for some important reasons:
• This is the irst time the organization and life cycle of public climate inance in Indonesia
has been comprehensively mapped. It was challenging to identify comparable and reliable
public inance data, particularly given extensive decentralization and signiicant international
funding, and to understand the multiple roles of many actors in the inance system that has
undergone recent development.
• There is no systematic tracking of private inance in Indonesia. This is consistent with
well documented challenges associated with tracking private climate inance, in particular in
the global context Buchner et al., 2013.
• Public resources are currently focused on developing enabling environments, and
developing and testing approaches to mitigation and adaptation. Such activities are likely to
encourage increased private investment in coming years.
By providing a snapshot of the landscape of public climate inance lows in 2011, this study provides
a useful baseline to measure changing investment patterns and progress going forward, and to map the
evolving relationship between public and private inance, and whether public resources are being spent wisely.
We do not include public money spent on the revenue side of budgets to support clean energy investments
e.g. tax breaks, feed-in tarifs in our mapping. Such support generally pays back investment debt or equity.
Including it in addition to investment expenditure
9 In some cases, our landscape tracks movements of inance between actors that are considered disbursements by one organization, but were
not disbursed through to the inal recipient in 2011. For instance, we were able to identify a budget transfer into the Ministry of Finance’s Risk
Mitigation Geothermal Fund in 2011, but no disbursements to projects occurred during that year. Similarly, we identiied a loan disbursed from a
multilateral development bank to a state-owned enterprise in 2011 for an energy eiciency program but no onward lending was provided from the
state-owned enterprise to the intended inal recipients. Throughout the Indonesia Landscape we show such movements of inance between actors
as inlows but do not map any outlow.
calculations would constitute double counting. Such policy incentives are, however, of fundamental
importance and future studies should aim to understand the extent to which they incentivize low-carbon and
climate-resilient investment by the private sector in Indonesia. See Box 5 for further discussion on the
contribution of policy incentives.
2.3 Data
