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ICCTF Annual Report

January – December 2010

Ministry of National Development Planning/ National Development Planning Agency (BAPPENAS)

ICCTF Indonesia Climate Change Trust Fund

ICCTF Annual Report 2010 i

Table of Content

Table of Content ............................................................................................................................................ i

Acronyms ...................................................................................................................................................... ii

Project Summary .......................................................................................................................................... iv

Executive Summary ....................................................................................................................................... v

I. Background ........................................................................................................................................... 1

II. Evaluation of Progress during the Reporting Period ............................................................................ 2

II.1. Objective 1: Support priority climate change initiatives to be funded in the interim period selected………………………………………………………………………………………………………………….....2

II.2. Objective 2: Provide support and development for the implementation mechanisms of the ICCTF nationally and internationally………………………………………………………………………………..5

II.3. Objective 3: Support capacity development needs of the governments of Indonesia for the efficient and effective implementation of the ICCTF……………………………………………………....7

II.4. Objective 4: Supporting and strengthening the ICCTF Secretariat………………….............10

III. Risk Management ............................................................................................................................... 12

IV. Partnership .......................................................................................................................................... 13

V. Challenges, Responses and Lessons Learned ...................................................................................... 13

VI. Conclusion and Way Forward ............................................................................................................. 14

ICCTF Annual Report 2010 ii

Acronyms

BAPPENAS Badan Perencanaan Pembangunan Nasional

The National Development Planning Agency of Indonesia

DRPHLNJM (Blue Book)

Daftar Rencana Pinjaman dan Hibah Luar Negeri Jangka Menengah List of Medium Term Plan Funded by External Loans and Grant

BPKP Badan Pengawasan Keuangan dan Pembangunan Financial Development Comptroller/Financial And Development Supervisory Board

CSO Civil Society Organization

DIPA

Daftar Isian Pelaksanaan Anggaran Government budgeting document

EA Executing Agency A Government institution, Line Ministries, Government Agencies and Local Government, which is eligible to submit project proposals to the ICCTF and responsible for executing the project

EQ Management and use of equipment and inventory

FM Financial Management

GHG Greenhouse gas

GoI Government of Indonesia

DRPPHLN (Green Book)

Daftar Rencana Prioritas Pinjaman Hibah Luar Negeri List of Annual Priority Activities Funded by External Loans and Grants

HR Human Resource

IA Implementing Agency Institutions including Government, civil society, private sector and/or academic institutions, partnering with an Executing Agency, responsible for the actual implementation of an ICCTF supported project

ICCSR Indonesia Climate Change Sectoral Roadmap

ICCTF Indonesia Climate Change Trust Fund

LKPP Lembaga Kebijakan Pengadaan Barang/Jasa Pemerintah Financial report of the central Government

ICCTF Annual Report 2010 iii

LOA Letter of Agreement

NPD National Project Director

PP Project Progress report and rate of delivery

PPP Public Private Partnership

PR Procurement of goods and/or services

QPR Quarterly Progress Report

ROI Return of Investment

ROR Assets, Rate of Return

RPJM Rencana Pembangunan Jangka Menengah National Midterm Development Plan

SOP Standard Operating Procedures

Yellow Book National Development Plan: Indonesia Response to Climate Change. List of climate change initiatives submitted by Line Ministries

CDM Clean Development Mechanism

PoA Program of Activities

REDD+ Reducing Emissions from Deforestation and Degradation, Conservation of Existing Carbon Stocks and Enhancement of Carbon Stocks

MoA Ministry of Agriculture

MoMaF Ministry of Marine and Fisheries

MoI Ministry of Industry

MoNE Ministry of National Education

BAPPEDA City Planning Agency

ICCTF Annual Report 2010 iv

Project Summary Funding Status

Project Locations

$3,033,185

$848,499

$1,247,843

$2,178,484

$1,206,872

$4,633,199

Remaining Funds

Support and Development for ICCTF

Funded Project: Sustainable Peat Land Management (Ministry of Agriculture)

Funded Project: Energy Conservation (Ministry of Industry)

Funded Project: Public Awareness on Climate Change (BMKG)

Energy conservation: Participants of energy conservation program from 50 steel and pulp and paper

Public Awareness & Training: Bau-Bau, Southeast Sulawesi; Batu-Malang, East Java; Indramayu, West Java; Kamal Muara, Jakarta; Serdang Bedagai, North Sumatra Peatland Management:

Jambi, Riau, Central Kalimantan and South Kalimantan

ICCTF Annual Report 2010 v

Executive Summary

This reporting period illustrates the PREP-ICCTF goals to support the efforts of the GOI and all stakeholders to reduce emissions of greenhouse gases, move the country towards a low-carbon economy, and adapt to the negative impacts of climate change. The Government of Indonesia (GOI) established the Indonesia Climate Change Trust Fund (ICCTF) decree in September 2009. The ICCTF shall be nationally managed (through the establishment of the National Trustee), and is part of Government’s commitment to implement the Jakarta Commitments to enhance national ownership and improve aid coordination in response to climate change. Before the National Trustee being established, the Government and the UNDP shall jointly establish and implement the project titled “Preparatory Arrangements for the Indonesia Climate Change Trust Fund (PREP-ICCTF)”. Under terms of the signed Letter of Agreement (September 2009), the objects of the project shall be to (1) Provide support to priority climate change initiatives as prioritized by the Government, during an interim period, while the ICCTF is being established; (2) Provide support and development for establishment of the ICCTF; and (3) Support capacity development needs of the Government of Indonesia for the efficient and effective implementation of the ICCTF. The project shall enable the Government and national trustee to gradually assume full operational responsibility within the 18 month interim period. Each objective sets a define milestone in the implementation of the PREP-ICCTF project and is captured in this reporting period. Some key highlighted milestones are:

Fully Operational of ICCTF Currently, ICCTF has been fully operational through institutional, legal and organizational arrangements. This implies matters such as the establishment of ICCTF Secretariat (i.e. office and staff), work plans, Standard Operating Procedures (SOPs), results framework, monitoring and evaluation mechanisms.

Selection of priority climate change initiatives Based on the GOI’s series of primary and secondary sectors in which investment activities should be prioritized for ICCTF, there are three (3) priority windows that ICCTF has been focusing on. These windows are the Energy, Sustainable Forestry and Peat Land, and Resilience and Adaptation. Further, 3 pilot projects were selected through rigorous consultation with the Technical Committee (hereinafter TC) and Steering Committee (hereinafter SC). The first batch of projects was solicited through two calls for proposals announced in December 2009. Over one hundred project digests were submitted by various line Ministries which were subsequently narrowed down to three.

Selected climate change initiatives are funded, Letter of Agreement (hereinafter LoA) between UNDP, Executing Agencies and ICCTF signed, monitored and evaluated On the 3rd of September 2010, three line ministries (MoA, MoI and BMKG) signed funding on new strategic projects to overcome the impact of climate change in Indonesia. With the total value of over 4.5 million US dollars, the three projects (executed by MoA, MoI and BMKG) are addressing three main climate change concerns; addressing green house gas emissions from Indonesia’s peat lands, fostering awareness on climate change amongst the public and mainly farming and fishing communities, and assisting the industrial sectors to identify cost-efficient energy saving opportunities. The three projects are the first to be funded under the Indonesia Climate Change Trust Fund (ICCTF).The selection process involved relevant ministries and contributing development partners. Moreover, project site assessments have been conducted for the three projects and a monitoring and evaluation framework has been developed.

Project Locations

ICCTF Annual Report 2010 vi

Implement capacity development for potential beneficiaries ICCTF Governance: Up to date, ICCTF has conducted capacity development for GoI, covering activities such as Project Management Implementation Guidance (PMIG) training for Executing Agencies; the development of Log Frame Analysis (LFA); series of Focus Group Discussions (hereinafter FGDs) in LULUCF (Land Use, Land Use Change and Forestry), Energy efficiency, renewable energy, climate change adaptation in health, agriculture, and marine and fisheries sectors; CSO outreach and involvement workshop; field visit study on Trust Fund in Brazil and supported the GoI in attending the UNFCCC Conference in Cancun, Mexico. Selected Entities: There were several activities conducted in the capacity development for over 60 entities consist of line ministries of GoI (MoA, BAPPENAS, MoI, BMKG, DNPI, etc), universities (University of Jambi, University of Riau, etc), private sectors (kadin), international and local non-government organization (Walhi, Care, Kehati, WWF, etc). These activities include the finalization of LOA and Annual Work Plan (AWP) of MOA, MOI and BMKG. Further, under the guidance of TC, ICCTF Secretariat has conducted series of workshop to develop and finalize the Standard Operating Procedure (SOP) of ICCTF under National Trustee. This draft has been presented to the TC meeting in November and SC meeting in December.

Based on the BAPPENAS Ministerial Decree No.59/M.PPN/HK/09/2010, the composition of the SC of ICCTF was revised as follows:

Chairman: Vice Minister of National Development Planning Agency /Vice Chairman of BAPPENAS

Cho-Chair: Chief Executive Secretary of Ministry of National Development / First Secretary of BAPPENAS

Members: 10 members from Coordinating Ministry for Economic Affairs, BAPPENAS, Ministry of Finance, Ministry of Home Affairs and National Council for Climate Change.

Since being established, the ICCTF has been recognize globally as Indonesia’s leading GOI managed trust fund for climate change. This is proven when ICCTF were recognized as a legitimate trust fund for climate change in Indonesia on the World Resources Institute (WRI) Report focusing on the legitimacy of Institutions for Climate Finance. The establishment of the ICCTF through PREP-ICCTF project runs on track. In addition, PREP- ICCTF supported the development of the Standard Operation and Procedure, National Trustee Selection Mechanism and also the implementation of capacity building both for selected entities and governance of ICCTF. Further, PREP ICCTF, through the Secretariat, will continue to support the functional of the ICCTF secretariat.

In the next quarter ICCTF is set to initiate the Climate Change Policy Coordination and Dialogue Forum, Inter-university Network Centre (a forum which intended as a bridge to communicate with local government and experts), finalize the ICCTF Standard Operating & Procedure and the National Trustee selection.

ICCTF Annual Report 2010 1

I. Background

Climate change is today considered the biggest challenge facing mankind. According to the Intergovernmental Panel on Climate Change (IPCC) contemporary temperature rises, precipitation changes, sea level rise and extreme weather events such as storms, floods and droughts which are already impacting countries around the world may be ascribed man made climate change. Indonesia is among the countries which will be severely affected by these negative consequences of climate change. Attempts have been made to mitigate climate change through the setting of binding greenhouse gas emission targets for developed countries (Kyoto Protocol, 1997). Additionally, national, sub-national, private and voluntary mechanisms are being developed in order to attempt to reduce or avoid Green House Gas (GHG) emissions. To minimize the negative impacts of climate change and to adapt accordingly, assessments of the vulnerability of countries to climate change and adaptation plans and programs have been made. However, much greater efforts and more ambitious targets have to be formulated in order to prevent catastrophic impact of climate change. Furthermore, coordination of the existing efforts to mitigate and adapt to climate change is crucial in order to ensure effective development assistance on this area. The Indonesian Climate Change Trust Fund (ICCTF) is created as a response to this need. The ICCTF is led and managed by the GOI to ensure that international and private sector support are harmonized and are aligned with national development plans, in accordance with the principles of the Jakarta Commitment (2008). The ICCTF was soft-launched in Jakarta, Indonesia by the Minister of National Development Planning and Minister of Finance on 14 September 2009. Generally GOI has enjoyed favorable experiences with multi-donors trust funds; however, trust fund modalities have been managed by multilateral organizations. As a result, government institutions have limited practical experience in the management of these trust funds, such as trustee arrangements and the necessary administrative and fiduciary oversight capacity to attract international funding. In order to ensure an efficient, transparent and accountable nationally managed implementation. In this regards, GOI has invited development partners to contribute to the further development of ICCTF so that it can in the near future function as a nationally managed, multi donor funding mechanism for mitigating and adapting climate changes. ICCTF needs to be further operationalized through institutional, legal and organizational arrangements. This implies matters such as clear targets, work plans, Standard Operating Procedure (SOPs), Result Framework, Monitoring and valuation Mechanisms, an initial project pipeline of activities to be financed by ICCTF. Overall, the fund’s strategy, structuring, features and procedures need to be refined and finalized.

A number of development partners have readily responded to GOI’s request for contributing to further develop the ICCTF. GTZ has provided assistance to Bappenas in the form of an advisor to support the technical development of ICCTF Blueprint and to operationalize the fund. The government of the United Kingdom, through DFID, has offered grant financing to support the full establishment of the ICCTF. In turn, Bappenas requested UNDP to provide technical and managerial assistance with the objective to fully operationalize the ICCTF and initiate the project “Preparatory Arrangements for the Indonesia Climate Change Trust Fund” (Hereafter referred to as PREP-ICCTF.


The goal The goal of the PREP-ICCTF is enable the government of Indonesia and its development partners to enhance the effectiveness of their response to climate change.

The Objective The goal of the PREP-ICCTF project shall be accomplished through three objectives:

Objective 1: Support initiatives on climate change as prioritized by the GOI, for an interim period while the ICCTF is being set up.

Objective 2: Provide Support and Development for Establishment of the ICCTF

Objective 3: Support capacity development needs of the government of Indonesia for the efficient and effective implementation of the ICCTF.

II. Evaluation of Progress during the Reporting Period

II.1. Objective 1: Support priority climate change initiatives as prioritized by the government, for interim period while the ICCTF is being established.

II.1.1. Output 1.1: Priority Climate change initiatives to be funded in the interim

period selected

Milestone: Selection of priority climate change initiatives

Progress:

In this reporting period, 3 pilot projects were selected through rigorous consultation with TC and SC. The first batch of projects was solicited through two calls for proposals announced in December 2009. Over one hundred project ideas were submitted by various line Ministries which were subsequently narrowed down to three.

In addition to standard project selection criteria such as impacts, sustainability, scalability and synergy, the capacity and experience required to conduct large and innovative projects in a short time frame, and whether the projects were high priority for the Ministries were also considered. Further, proposals from Steering Committee member institutions were omitted to prevent conflict of interest. The approved projects are as follows:

Energy Window

The Ministry of Industry is implementing a project named Implementation of Energy Conservation and CO2 Emission Reduction in Industrial Sector (Phase 1). This project is focusing on the Steel Industry and Pulp and Paper Industry through improving institutional strengthening, networking and capacity building, mainly to identify energy saving opportunities. The result of this project will show reliable baseline data to enable

development of strategic planning for energy conservation and CO2 emission production in steel industry and pulp and paper industry.


Forestry and Peat Land Window

Indonesia’s peat land covers an area of about 20 million hectares, and stores more than 40 Gt of carbon. This highly fragile carbon can easily emit CO2 through land clearing, burning, and draining to levels which increase carbon oxidation. Thus the challenge is how to test technologies that could reduce GHG emission and increase C-sequestration on peat lands. The

Ministry of Agriculture is carrying out a Research and Technology Development of Sustainable Peat Management to Enhance Carbon Sequestration and Mitigation of Greenhouse Gas Emission. Information obtained from this project could contributes to the commitment of Indonesia to reduce 26% of GHG emission, of which 9.5% should come from peat lands. Results from this project will be used to develop strategy, policy brief and regulation to strengthen the proposed presidential decree on national action plan on GHG emission reduction and the presidential instruction on measureable, reportable, and verifiable GHG inventory.

Resilience Window

To increase the awareness of the general public, and especially farming and fishing communities of the affects of climate change, BMKG in partnership with MoMaF, MoA, BPPT, LIPI and MoNE is implementing a project named Public Awareness, Training and Education Program on Climate Change Issue For All Level of Societies in Mitigation and Adaptation. The project includes increasing awareness of farmers

and fishers on climate change through local community radio program and dialog with farmers and fishers on their existing regular meeting, increasing capacity of extension officer on climate change through training of trainer (TOT), integrating issues of climate change to students through curriculum, and increasing awareness on climate change for general public through various media channels. The project will contribute to enhanced food security and higher adaptive capacity of the targeted farming and fishing communities, which constitute the major proportion of livelihoods in Indonesia.

The three projects are the first to be funded under the ICCTF. This is kind of exercise for ICCTF to manage the project. Through this exercise, the ICCTF will be strengthened. Further, it has shown the operational readiness of the ICCTF. The remaining challenge is to select project proposal under more structured process.

II.1.2. Output 1.2: Selected Climate change initiatives funded, monitored and evaluated

Milestone: Selected climate change initiatives are funded and monitored by

ICCTF


Progress:

Following up the result of the project selections, ICCTF has launched the LOA signing ceremony on 3rd September 2010 with three line ministries/institutions. Further, UNDP as interim ICCTF fund manager has delivered first payment for the three pilot projects. The detail number of the total budget and budget delivered to the line ministries/Institutions are as follows:

No Project Total Budget 2010

1 MOI IDR 18.232.075.000,-

2 MOA IDR 10.443.400.000,-

3 BMKG IDR 10.100.500.000,-

MOA Project:

In this reporting period, the project has set up the demonstration plot in 4 areas (Muaro, Jambi; Pelalawan, Riau; Banjar Baru, South Kalimantan; Pulang Pisau, Central Kalimantan) including identification and characterization of the peat land. A set of Biophysical map of the demonstration plot (hereinafter Demplot) has been generated by the activity. Further, the

project implemented the capacity building trough training on MRV for 45 government officials and local university staff in 4 areas; land processing, and provision of land cultivation material, such as pupuk gambut (peat fertilizer) and development of guidance and module. The projects include provision of carbon measurements equipment, such as IRGA, GC, AWS, peat auger. MOI Project:

In this reporting period, the project conducted many activities during the project preparation. The MOI implemented road shows to socialize and gather the potential partners of steel and local government awareness to the project at the provincial level and project was launched by Minister of Industry in Jakarta. MOI also hired National Monitoring Consultant, Regional Consultant and

conducted training for the MOI staff on energy conservation and training for Energy Auditor Facilitator.

BMKG Project:

The project successfully gathered information from the field and stakeholder to develop the climate change content to be delivered for community especially fishers and farmers in targeted area through workshops and FGDs. Moreover, the project will soon develop modules for students. In partnerships with Trans TV and BPPT, the project will develop short Movie “Si Bolang”. Further, in partnership with Metro

TV, BMKG project will develop mitigation and adaptation film conducted by Farmers and Fishers in Java Island. This project is a cross sector project, involving Ministry of Education, Ministry of Agriculture, Ministry of MaF, BPPT, LIPI.


The implementation of the projects contributed to the capacity of the targeted beneficiaries and the GOI to face the climate change. Up to date, 4 provinces, Riau, Central Kalimantan, South Kalimantan and Jambi have staffs that have capacity to measure the carbon stock and carbon emission in peat-land. Meanwhile, the implementation of training conducted by MOI, have improved their capacity on energy conservation and emission reduction in the industrial sector especially for steel and pulp and paper industry.

II.2. Objective 2: Provide support and development for the implementation mechanisms of

the ICCTF nationally and internationally

II.2.1. Output 2.1: Functioning policy dialogue framework, increased awareness of ICCTF nationally and internationally

Milestone 1: Implementation of quarterly policy dialogues where inputs to ICCTF project proposals will be discussed later in the next quarter.

Progress:

Several Policy dialogue activities was conducted by ICCTF on a regular basis through TC and SC meeting that was attended by related ministries and institutions as stakeholders of ICCTF as follows:

1. Technical Committee and Secretariat Meeting at Grand Preanger Hotel in

Bandung, 27-28 August 2010

2. LoA signing ceremony at BAPPENAS in Jakarta, 3 September 2010

3. Technical Committee and Secretariat meeting on the development of

ICCTF windows; monitoring and evaluation framework at Hotel Puri Saron

in Lombok, 6-9 October 2010

4. Steering Committee Meeting at BAPPENAS in Jakarta, 26 October 2010

5. Technical Committee Meeting & Secretariat Meeting in Bali, 1-3

November 2010

6. SC, TC and Secretariat Meeting at Hotel Novotel Soechi in Medan, 27-28

November 2010

7. SC Meeting at Bappenas in Jakarta, 16 November 2010

8. MoI conducted road-shows and socialization on energy conservation and

CO2 emission reduction for local government, steel, and pulp and paper

industries in 6 regions as follows: Medan, 29 Sept 2010, Palembang dan

Surabaya 27 Oct 2010, Semarang, and Banten dan Bandung, 3 Nov 2010.

9. ICCTF SOP Improvement Workshop attended by Bappenas, DFID, AUSAID,

GTZ, JICA, AFD, UNDP, Lines Ministries, Independent Expert and ICCTF

Secretariat at Hotel Nikko in Jakarta, 19 – 20 May 2010

10. Steering Committee Meeting at Bappenas in Jakarta, 14 December 2010

Milestones 2: PREP ICCTF and ICCTF Communication Strategy developed

Progress:

A Draft of ICCTF Communication Strategy was developed by the Communication Consultant. The communication activities generally utilize website, newsletter, press release and brochure/handout with targeted audiences including many stakeholders (GOI, Donors and CSOs) and public in


general. The draft of the communication strategy proposed that for the targeted stakeholders, it will be implemented through distribution of newsletters, provision of booklet and the improvement of the website. Furthermore, to reach a broader audience, means of communication that will be used are mainly involves newspaper, TV and radio.

Milestones 3: Conduct public relations and communication of ICCTF to Domestic and Global audiences

Progress:

Up to date, the ICCTF has successfully produced regular newsletters, updated website, booklet, fact sheet, presentation template, and drafted a movie clip which is targeted to local, national and international audiences. At local and national level PREP-ICCTF has developed several communications products as follows:

1. Press release of LOA Signing ceremony at BAPPENAS in Jakarta, 3

September 2010

2. Press release of Ajang Kreasi Remaja at Pasar Seni Ancol in Jakarta, 19

December 2010

3. Press release of Ministry of Industry on launching the energy

conservation and CO2 emission reduction in Steel industry and Pulp &

paper Industry at MoI in Jakarta, 23 December 2010.

4. BMKG has developed 2 leaflets on climate change awareness raising for

community in general (2,000 copies) and has been distributed to the

community through ICCTF funded project implemented by BMKG

5. ICCTF Newsletter

6. New ICCTF brochure is currently being drafted to be used use as a fund

raising tool.

At the international level, PREP ICCTF developed several communication products and implemented activities as follows:

a. Update and revised ICCTF website, www.icctf.org. The redesign involved the makeover of the structure of the website including the information architecture (navigation schemes and naming conventions), the layout or the pages (wireframes or page schematics are created to show consistent placement of items including functional features), and the conceptual design with branding. The new design allows the visitors to access to something valuable. This can include educational tools, detailed information on the current and past projects and also some features which visitors can add and make it more interactive. Visitor statistics indicated that the website of ICTTF accessed not only by Indonesian but also visitor from United Stated, Romania, Russia, Japan, Australia, France, Great Britain, Singapore, Canada, European Country etc. In average, 622 visitors from different countries have accessed the website.

b. ICCTF CD consists of the National Action Plan for GHG emission reduction (RAN-GRK), Indonesia Climate Change Sectoral Roadmap (ICCSR), ICCTF updates and the list of climate change initiatives submitted by Line Ministries (Yellow Book). This CD was also brought and presented to the COP meeting in Cancun Mexico.

http://www.icctf.org/


c. ICCTF Presentation, presented in Bonn, Germany and Cancun Mexico.

d. ICCTF is currently developing a movie clip on ICCTF profile

Through the intensive policy dialogue and improved communication strategy implemented in this reporting period, ICCTF recognized nationally as well as internationally as one of climate change financial mechanism. World Resources International on its report reviewing the ICCTF, together with other fund, such as The Bangladesh Climate Change Resilience Fund (BCCRF) and Brazil’s Amazon fund, Global Environment Fund, Montreal Protocol Fund, and Climate Investment Funds and Adaptation Fund.

II.3. Objective 3: Support capacity development needs of the governments of Indonesia for the efficient and effective implementation of the ICCTF

II.3.1. Output 3.1: Capacity developed for potential beneficiaries

Milestone 1: Conduct a rapid capacity assessment

Progress:

PREP-ICCTF has conducted continuous capacity assessments for implementing partner, MoA, MoI and BMKG to support the capacity development as follows:

1. Proposal improvement workshop at Wisma Bakrie in Jakarta, 27 April

2010

2. Workshop on technical substance administration and financial

improvement of shortlisted ICCTF project proposal at Hotel Nikko in

Jakarta, 6 May 2010

3. Pre project site assessment to BMKG site in Bau-Bau, Southeast Sulawesi,

21-23 September 2010. From Representatives of ICCTF, the Ministry of

National Development Planning (BAPPENAS) and the Meteorology,

Climatology and Geophysics Agency (BMKG) conducted a pre-project

assessment at the city of Bau-Bau in South Sulawesi. Bau-Bau is one of

five selected locations of the adaptation and resilience project “Public

Awareness, Training and Education Program on Climate Change Issue for

All Level of Societies in Mitigation and Adaptation” to be implemented by

BMKG. Public awareness campaigns on climate change and its impact on

food security for farmers and fishers will be delivered through local

community radio and other communication means in the target locations.

The assessment team met with local fishers and farmers, with

representatives of two local radio stations and BAPPEDA in Bau-Bau.

4. Pre-project site assessment to MOI project site to PT. Krakatau Steel in

Cilegon, Banten, 24 September 2010. Representatives’ of ICCTF,

BAPPENAS and the Ministry of Industry conducted a pre-project

assessment at the nationally owned steel company PT Krakatau Steel.

Krakatau Steel is one of the participants in the ICCTF funded energy

efficiency project “Implementation of Energy Conservation and CO2

Emission Reduction in Industrial Sector (Phase 1)”. The assessment team

met with Krakatau Steel’s head of energy division and relevant engineers

in order to discuss the current situation of Krakatau Steel and its future


potential for energy conservation and management. The project was

officially launched under the patronage of the MOI which was conducted

at Krakatau Steel’s site in Cilegon in October 2010.

5. Pre-Project site assessment to MoA site project in Jabiren, Pulang Pisau,

Central Kalimantan, 11-13 October 2010. Representatives of ICCTF,

BAPPENAS and members of the peat land identification and

characterization team from the Ministry of Agriculture conducted a pre-

project assessment to site where the ICCTF peat land project “Research

and Technology Development of Sustainable Peat Management to

Enhance Carbon Sequestration and Mitigation of Greenhouse Gas

Emission” is being implemented. The assessment team met with the

Office of Agricultural Technology Development (BPTP) Central Kalimantan

and discussed key activities to be conducted under the ICCTF program

and invited WWF to present their lessons learn from previous and current

program.

6. Administration and financial assessment to EA of ICCTF funded project

with the following details: MoA project on 17 December 2010; MOI

Project on 23 December 2010; and BMKG on 16 December 2010. These

assessment was conducted to identify the capacity of the implementing

partners to implement the administration and financial transaction in

transparent accountable, effective and efficient in line with the GOI and

UNDP regulations. Participatory process to be taken to raise the

ownership of the implementing partner.

Milestone 2: Implement capacity development for potential beneficiaries

Progress:

1. Several workshops on technical substance, administration and financial

improvement of shortlisted ICCTF project proposals were conducted for

capacity development of selected entities at hotel Nikko in Jakarta, 5 May

2010

2. Workshop on administration and financial management for ICCTF

Secretariat, PMU and Line Ministries was conducted in Jakarta, 5 October

2010

3. Series of meetings regarding the finalization of LOA & AWP with MoI,

MoA, and BMKG was conducted in Jakarta on August 2010.

4. Workshop on Peatland management, lesson learn from WWF at Aquarius

hotel in Palangkaraya, 13 October 2010

5. Training on audit energy for MOI energy conservation working group was

conducted at Balai Diklat Pasar Rebo in Jakarta, 6-9 October 2010

6. MoI ICCTF project conducted training on Audit Energy with 59

Participants from community with physics, chemistry metallurgy, and

electronic background at Balai Diklat Industri Pasar Rebo in Jakarta, 8-11

December 2010


7. MoA ICCTF project conducted peat carbon stock and emission CO2

measurement training with 45 participants from local government and

project team in South Kalimantan, 12-15 December 2010

8. MOA ICCTF project conducted peat carbon stock and emission CO2

measurement training with 54 participants from local government and

project team in Pekanbaru, Riau, 19-22 December 2010

9. Provision of carbon measurement equipment to measure carbon stock

and carbon emission in Peat land, such as IRGA, Gas Chromatography,

AWS to MoA

10. Project Management IG training in Papua, 6 people representing the

MoA, MoI, and BMKG

II.3.2. Output 3.2: Capacity developed for ICCTF governance entities

Milestone: Implementation of capacity development for ICCTF governance entities

Progress:

1. Four people representing Bappenas, UNDP and ICCTF Secretariat

participated on Project Management Implementation Guideline training

that was held in Papua, 11 – 12 Jul 2011

2. Series of land based mitigation window consultation meetings was held

on July 2010

3. Secretariat meeting at SG 1-2 Room Bappenas in Jakarta, 16 August 2010

4. TC and Secretariat ICCTF Meeting on National Trustee selection

preparation in Jakarta, 20 August 2010

5. CSO Outreach and Involvement workshop was conducted at Hotel Grand

Kemang in Jakarta, 30 August 2010,

6. Field visit study to Brazil’s Amazon Trust Fund, 25 September - 2 October

2010

7. CSO Outreach and involvement workshop at Hotel Akmani in Jakarta, 28

September 2010

8. Workshop on financial and administration system for Secretariat, PMU

and line ministries in Jakarta, 5 October 2010

9. Coordination meeting, Finalization of SOP and National trustee selection

mechanism at JW Marriot hotel in Jakarta, 28 October 2010

10. FGD on ICCTF Energy window investment strategy development at

Kuningan Suites in Jakarta, 9 November 2010

11. FGD on Climate change adaptation focusing in marine and fisheries sector

at Kuningan Suites in Jakarta, 11 November 2010

12. Utilization of seasonal information and climate insurance to improve

adaptation strategy of small farmer at Hotel Akmani in Jakarta, 18

November 2010

13. Support to UNFCC Conference in Cancun, Mexico, 29 - 10 December 2010

14. Energy window FGD at Akmani Hotel in Jakarta, 1 December 2010

15. Adaptation and resilience window FGD on Health sector and FGD

Forestry and Peat Land Window, 1 December 2010


II.3.3. Output 3.3: Support to secretariat to appoint National Trustee

Milestone: Development of national trustee selection mechanism

Progress:

UNDP has developed the draft of National trustee selection mechanism through discussion with TC. Further, the draft of national trustee selection mechanism guidelines was presented to SC. There are three modalities currently under consideration regarding the selection and appointment of the National Trustee, i.e.: Direct appointment, Appointment in consultation with key stakeholder, and open tender process as a formal competitive procurement process. Based on the comparison of the three modalities, it is proposed that the trustee should be selected through open tender mechanism.

On the SC meeting, it is agreed to apply the open tender mechanism as the mechanism for National trustee selection. In order to accelerate the procurement process of National Trustee, the SC requested UNDP to conduct the procurement process for National Trustee. However further clarification need to be made on who will issue the contract as UNDP will do a handover to GOI and the selected National Trustee. Currently, procurement guidelines and the TOR is being developed by PREP-ICCTF with consultation to the Secretariat and Technical Committee.

II.3.4 Output 3.4: Monitoring Instruments for ICCTF activities proposed and developed

Milestone: Implementation of UNDP monitoring and evaluation system

Progress:

Based on the UNDP monitoring and evaluation system, PREP-ICCTF proposed monitoring framework for the ICCTF Funded Project and also for PREP-ICCTF. The framework includes the indicator, methodology, frequency data collection and also utilization of the data. Based on this framework, the project implemented monitoring and evaluation process.

Intensive coordination and joint monitoring between GoI, UNDP and line ministries was being implemented to ensure the project runs effectively and efficiently. As a plan, a wider monitoring and evaluation for ICCTF will be developed including the project tracker database.

II.4. Objective 4: Supporting and strengthening the ICCTF Secretariat

II.4.1. Output 4.1: ICCTF Secretariat and ICCTF Technical Committee fully functional, PREP ICCTF project monitoring and administrative requirements met

Milestone 1: Development of Standard Operational Procedure (SOP) of ICCTF

Progress:

The Standard Operating Procedures (SOP) cover the operations, roles and responsibilities of the ICCTF Governance entities. Last draft of the SOP has been developed and presented to the SC for endorsement. In order to accelerate the process, the decision making process should be simplified. On the newest draft, minimum participation for decision consists of the Chairperson or Co-Chair and one member from GoI and Donor.


Another issue regarding the SOP was the CSO Involvements, based on the input from the SC, CSOs can have representatives at the SC and will have voting rights. However, CSO representatives who are sitting within the SC cannot be the beneficiary of ICCTF projects. Moreover, CSOs were categorized into Academia, Non-Profit (including indigenous) organization and private sectors (association). CSO representatives will be involved in the Policy Dialog Steering Committee meeting.

The Secretariat with guidance from TC will late revise the SOP to accommodate the inputs.

Milestone 2: ICCTF Secretariat fully functional

Progress:

ICCTF Secretariat

As mentioned at the ICCTF Decree, main mandate of Secretariat is to:

Provide support to technical committee and steering committee meetings to ensure that decisions are implemented and provide minutes of meeting.

Provide support to the technical committee in liaison and coordination between the steering committee and other fund entities, and with interested parties outside of ICCTF.

Support technical committee in monitoring performance of the interim trustee.

Further, the secretariat ICCTF has role and responsibilities in:

Planning, Monitoring and Evaluation

Support to the project selection and implementation

Administrative support

Communication On this reporting period, the Secretariat has conducted the function as required. As the initial preparation, ICCTF Secretariat procured the ICCTF Equipment, such as Desktop computer, printer, Software, etc. Meanwhile ICCTF also arrange correspondence between ICCTF TC and SC including with the external correspondence with line ministries and other institutions. Secretariat also arranges communication equipment for the management through provision of internet connection (i.e. ICCTF website).

Milestone 3: Technical committee fully functional

Progress:

ICCTF Technical Committee mandate is to advice and review on technical issues, including review/approving project selection criteria and the actual selection of the project. Further, the TC shall provide high quality advice, recommendation and other supports for SC to make strategic decisions relating to climate change programmatic issues.

In the reporting period, the TC conducted the function as required. The TC reviewed the ICCTF document before sending it to SC, such as investment strategy, communication strategy, SOP etc.


Milestone 4: ICCTF investment strategy and proposal selection criteria is being developed

Progress:

PREP- ICCTF supports the ICCTF through development of the investment strategy. The drafts of investment strategy for each window have been finalized. It is developed through consultation and discussion process with related stakeholders.

Energy Window

The ICCTF objective on Energy Window is to contribute to the improvement of energy security and reduction of GHG emissions from the energy sector in Indonesia. The objective will be achieved through two main strategies, which are to facilitate financing of low-carbon energy supply technologies and promote the implementation of energy efficiency.

Resilience and Adaptation Window

The objective is to prepare Indonesia’s national and local institutions, as well as vulnerable communities, for the current and possible future impacts of climate change. These include improved planning and resource management and expanding coordination to deal with inter-sectoral and cross cutting issues. The implementation strategies are enhancing the dissemination of climate information both the quality and relevance from user perspective. Additionally, it is also to increase capacity of analysis and adaptation strategies.

Forestry and Peat Land window

The objectives are to contribute to Indonesia’s efforts to reduce emissions from deforestation and forest degradation while advancing efforts toward efficient land uses and sustainable forest resources management.

The implementation strategies are to support Indonesia’s initiatives on reducing land based emissions, including REDD+ strategies; enhance forest carbon stocks and reduce emissions from peat fires and peat-land degradation.

III. Risk Management

As the project involves GoI, the political support and commitment of the government is very crucial in implementing the project. Therefore all major decisions that are needed in order to deliver the project outputs need to be made in timely order by SC. Delays on making any decision will affect the inability of project to deliver results according to expected timeframe. In order to avoid such condition PREP-ICCTF has developed and maintains close engagement with Bappenas and other SC members to clarify project objectives and outputs also roles in project implementation. Further, assessing, building and/or transferring capacities to government officials could not happen if appropriate numbers and at right levels of public officials are not assigned to work on the project.

The project involves various ministries where other ministries may not provide the required level of political support and human resource allocation to implement project. MoF may need to make important decisions in relation to the ICCTF, potentially including decrees and legislation.


Meanwhile various ministries can take part in climate change initiatives, and need to be involved in various project activities such as rapid capacity assessment and training activities. Therefore Ministries need to be fully committed to the project.

IV. Partnership

To achieve the goals of the project, the PREP-ICCTF has developed close coordination with stakeholder concerned such as GTZ, JICA etc. Further, PREP- ICCTF is involved with a wider stakeholder who has concerns on the climate change including the provincials’ government, districts’ government, universities, private entities including the business association, and also CSO. More than 50 Ministries and Institutions participated in ICCTF activities. The PREP-ICCTF coordinates closely with all Executing Agencies to accelerate the implementation of the funded project priorities and ensuring that the project implemented effective and efficiently. The Partnership developed with respect mutual support and synergistic outcomes avoiding redundancy and increase effectiveness and efficiency in implementing the project.

V. Challenges, Responses and Lessons Learned

Challenges

The project disbursement is the most challenges for the project, for this reporting period, the disbursement rate of all projects are 8.6%. As identify on the risk log, the organizational and political support was the challenge for this project.

Responses

Responding the challenges, PREP-ICCTF has developed and maintains good coordination with stakeholders.

Lessons Learnt

1. The absence of a strong planning, including a procurement plan, has caused some delays

in implementing the project such as delays in procurement of business and technical

support in the form of human resources, as well as funding decreases. Looking ahead, a

clear work plan supported by a strong partnership and good ways of working among all

stakeholders will result a good performance against the objectives and the project will be

timely delivered.

2. The administrative process taken for fund disbursement to finance the project was very

time consuming. Therefore, it is necessary to have a well prepared timeline planning

considering the bureaucracy process to make sure that the project is running as

scheduled.

3. ICCTF structure involves multi-stakeholders and therefore a clear understanding of roles

and responsibilities of each stakeholder is very important. This is one of the main reasons

why agreed SOP is needed.


VI. Conclusion and Way Forward

Conclusion

The establishment of the ICCTF through PREP-ICCTF project runs on the track. As mentioned previously, through the PREP ICCTF, ICCTF has supported initiatives on climate change as prioritized by the GOI. In addition, PREP ICCTF supported development of the Standard Operation and Procedure, National Trustee Selection Mechanism and also implement capacity building both for selected entities and governance of ICCTF. Further, PREP ICCTF, through the Secretariat, supports the functional of the secretariat.

Way Forward

1. Arrange the Policy Coordination and Dialogue Forum 2. Inter-university Network Centre: this forum intended as a bridge to communicate with

local government and experts. 3. Finalization of ICCTF Standard Operation & Procedure 4. National Trustee procurement

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