CIF DISBURSES 80 MILLION DOLLARS TO INDONESIA

Jakarta, Apr 4 (ANTARA) - The Climate Investment Fund (CIF) has agreed to disburse 80 million U.S. dollars in fund to Indonesia as the most prepared location for a carbon emission reduction pilot project.

Forestry Minister Adviser Hadi Susanto Pasaribu said on Sunday that the decision was made in a CIF partnership forum in Manila, in mid-March 2010.

The fund will be disbursed through the Forest Investment Programs (FIP). "Apart from Indonesia, Burkina Faso, Ghana, Laos, and Peru, also received such fund," Hadi said.

These countries had been chosen to represent their own regions and prepared for forest carbon reduction efforts, with some of the fund provided as a loan at a 0.25 percent interest per year.

According to Hadi, the fund could be increased depending on the respective government's investment strategy.

"The private sectors can also use the fund for an industrial forest plantation as a loan and, grant will be provided for the public sectors," he said.

The use of the funds by the private sector is considered beneficial because their forestry sector is borrowing funds from foreign banks at commercial interest rates, Hadi said.

"Indonesia is considered highly suitable as a pilot project because besides having vast forests it also have a national strategy to reduce emissions from forest degradation and deforestation (REDD plus)," he said.


Mitigation
Hadi said that Indonesia was lucky to utilize the funds, as 45 other countries were waiting for their turn also to be involved in the CIF program.

The CIF fund will be used to enhance climate change mitigation efforts such as the creation and strengthening of institutional management of forests by the Forest Management Unit (KPH) and monitoring development, climate change reports and verification (Monitoring, Reporting, and Verification (MRV) and mitigation.

"The fund will be allocated for the untouched work component under previous programs, such as the KPH and MRV. We will also avoid FIP program duplication," said Hadi.

The Forestry Ministry stated that foreign funding related to the role of forests in climate change prevention is only acceptable if in the form of grants, which referred to the principle of common but differentiated responsibilities adopted from the UNFCCC (United Nations Framework Convention on Climate Change).

The CIF is a collaboration between multilateral development banks and donor countries to bridge the lack of financing on climate change prevention that have not been handled in the existing schemes, such as GEF (Global Environment Facility), FCPF (Forest Carbon Partnership Facility) and the scheme developed by UNFCCC.

CIF consists of two trust funds, namely Clean Technology Fund (CTF) and Strategic Climate Fund (SCF).

Forestry investment programs are under the SCF which supports things such as investments for institutional capacity building, forest management, forestry mitigation efforts, and investment in the sectors that can reduce pressure from forests.

The trust fund for clean technology is focused on projects and low carbon technology transfer.

During the CIF meeting in Manila, CTF has also agreed to disburse 400 million US dollars for Indonesia, by encouraging the construction of a geothermal power plant.