Project Profiles November 2014 Indonesia Climate Change Trust Fund LIMA COP 20 CMP10 1-12 December Lima, Peru PROJECT PROFILES - November 2014
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Project ProfilesNovember 2014
Indonesia Climate Change Trust FundLIMA COP 20 CMP101-12 December Lima, Peru
PROJECT PROFILES - November 2014
LIMA COP 20 CMP101-12 December Lima, Peru
by 2020, with further emissions reductions of 41% expected with international support. Following this commitment, the Presidential Regulation no. 61/2011 on the National Action Plan to reduce GHG emissions (Rencana Aksi Nasional Penurunan Emisi Gas Rumah Kaca, henceforth RAN-GRK) was enacted.
The RAN-GRK is an action plan that explains how Indonesia should achieve its mitigation targets over the years 2010-2020. In addition, the RAN-GRK also serves as a guideline for local governments in formu-lating their action plans for reducing GHG emissions (RAD-GRK).
1.
ince 2003, Indonesia is classified as a lower middle-income country (MIC)1. Indonesia is a member of G-20 since this intergovern-mental forum was formed in 19992. It is the only Association of Southeast Asian Nations
(ASEAN) country in the G20 summit process3.
Indonesia’s dynamic development is characterized by a high rate of economic growth which positions the country among the leading economies in Asia. This fast economic development brings along challenges such as securing access to energy or alternative trans-port systems. Moreover, deforestation and fossil fuel combustion result in serious environmental impacts that rank Indonesia under the ten largest GHG emitting countries worldwide (World Resources Institute, 2011).
Indonesia is firmly committed to proactively contrib-ute to the mitigation of climate change risks. Moving forward on its path towards a low carbon economy, Indonesia plans to further invest in infrastructure, enhancing job creation, improving its energy security while providing attractive investment opportunities for foreign and domestic investors.
Indonesia has made important progress in climate pol-icy in terms of its mitigation and adaptation efforts. The development of a national climate change framework in Indonesia gathered significant momentum when Indonesia hosted the 13th COP of the UNFCCC in Bali in 2007. At the end of 2009, Indonesia announced its voluntary commitment to reduce Greenhouse Gas (GHG) emission 26% from Business as Usual (BaU)
Foreword
S
Presidentʼs Commitment"At the G-20 Pittsburgh dan COP15"
Reduce GHG emission by 2020"
26%! 26+15=41%!
Own Efforts " Own efforts + support from international community"
FORESTRY AND PEATLAND"
AGRICULTURE"
ENERGY AND TRANSPORT"
INDUSTRY"
WASTE "Pres. Decree No. 61/2011
RAN-‐GRK Pres. Decree No. 71/2011 GHG Inventory dan MRV
1Jonathan Glennie, The Overseas Development Institute (June 2011): The role of aid to middle-income countries: a contribution to evolving EU development policy, Working Paper 331, Table 2: Years of graduation from LIC to MIC since 2000, 111 Westminster Bridge Road, London SE1 7JD
2Yulius P Hermawan, Friedrich Ebert Stiftung (May 2011): G-20 Research Project: The Role of Indonesia in the G-20: Background, Role and Objectives of Indo-nesia’s Membership, Indonesia Office Jl. Kemang Selatan II No. 2A, Jakarta Selatan 12730, DKI Jakarta - Indonesia
3The Association of Southeast Asian Nations, or ASEAN, was established on 8 August 1967 in Bangkok, Thailand, with the signing of the ASEAN Declaration (Bangkok Declaration) by the Founding Fathers of ASEAN, namely Indonesia, Malaysia, Philippines, Singapore and Thailand. Retrieved from The http://www.asean.org/asean/asean-member-states
Figure 1 GOI Commitment of reducing greenhouse gas emissions by 2020
2.
With regard to GHG emission reductions, Nationally Appropriate Mitigation Actions (NAMAs) are a main vehicle for operationalizing mitigation actions in devel-oping countries.
In particular, NAMAs can be used to gain international support in achieving the 41% GHG emission reduction target. NAMAs are crucial for the Action Plan imple-mentation for three reasons:
(i) NAMAs are meant to provide important means and building capacities for operationalizing the RAN-GRK;
(ii) NAMAs can help Indonesia to access international funds, such as the Green Climate Fund; (iii) NAMAs enable the alignment of RAN-GRK with UNFCCC processes contributing to an UNFCCC post 2020 agreement.
Considering the size of investments needed to suc-cessfully implement Indonesia’s climate change strategy and considering the high demand for coordi-nation and harmonization of funding, the GOI launched the ICCTF on September 14, 2009. In accordance with the principles of the Jakarta Commitment (2008), the ICCTF will be nationally managed.
This is important to mention, as Indonesia was one of the first countries worldwide to create a national trust fund on climate change. Ever since, other countries followed in the pursuit of establishing similar trust fund entities.
The new and innovative NAMAs have been champi-oned by the ICCTF as a major instrument in achieving national mitigation targets. Indonesia has ever since been in the forefront to support the development of such (NAMA) projects.
Last September the ICCTF hosted its first NAMA summit. This investment summit has been a great opportunity for creating a platform and forum to pres-ent the current ICCTF NAMA project/program pipeline, share best practices and offer related ICCTF services to development partners, financial institutions and pri-vate sector. Due to the success of this first summit, the forum will be organized as an annually recurring event.
It is expected that solid and sound NAMA project pipelines will ease UNFCCC compatibility and fos-ter access to international funding while enhancing the recognition of Indonesia´s mitigation framework in conjunction with ICCTF’s efforts to spearhead the implementation of NAMAs.
Jakarta, November 2014
Ms. Endah Murniningtyas
Chairperson of the ICCTF MWA (Board of Trustees)Deputy of Natural Resource and Environment ofNational Development Planning Agency (Bappenas)
3.
AFR : Alternative Fuel and Raw MaterialsAPBD : Local Budget (Anggaran Pendapatan dan Belanja Daerah)APBN : State Budget (Anggaran Pendapatan dan Belanja Nasional)ATMI : Academy of Industrial and Mechanical Engineering (Akademi Teknik Mesin Industri)BAU : Business As Usual Bappenas : National Development Planning Agency (Badan Perencanaan Pembangunan Nasional)BLU : Public Service Agency (Badan Layanan Umum)BMU : The Federal Ministry for the Environment, Nature Conservation and Nuclear Safety of Germany (Bundesministerium fuer Umwelt, Naturschutz, und Reaktorsicherheit)CO2e : Carbon Dioxide EquivalentDEEP : Debottlenecking RE Project FinanceDG-NREEC : Directorate General of New, Renewable Energy and Energy ConservationEE : Energy EfficiencyEPR : Extended Producer Responsibility ERS : Emission Reduction Scenario ESCO : Energy Service CompanyFGD : Focus Group DiscussionGHG : Greenhouse Gas GRK : Greenhouse Gas (Gas Rumah Kaca)HPS : High Pressure SodiumICCSR : Indonesia Climate Change Sectoral Roadmap ICED : Indonesian Clean Energy DevelopmentIPCC : Intergovernmental Panel on Climate Change KAK : Term of Reference (Kerangka Acuan Kerja)KfW : Reconstruction Credit Institute (Kreditanstalt fuer Wiederaufbau)KPS : Government and Private Sector Cooperation (Kerjasama Pemerintah dan Swasta)
LED : Light Emitting DiodeMEMR : Ministry of Energy and Mineral ResourcesMoI : Ministry of IndustryMPW : Ministry of Public WorksMRV : Measurement, Reporting, Verification MSWM : Municipal Solid Waste ManagementNAMAs : Nationally Appropriate Mitigation Actions NPV : Net Present Value OPD : Local Government Organization PIP : Government Investment Agency (Pusat Investasi Pemerintah) PJU : Street lighting (penerangan jalan umum)PLN : State Electricity Company (Perusahaan Listrik Negara)PP : Goverment Regulation (Peraturan Pemerintah)RAN-GRK : National Action Plan for Green House Gas Emission Reduction (Rencana Aksi Nasional Penurunan Emisi Gas Rumah Kaca)RAD-GRK : Local Action Plan for Green House Gas Emission Reduction (Rencana Aksi Daerah Penurunan Emisi Gas Rumah Kaca) RE : Renewable EnergyREDD+ : Reducing Emissions from Deforestations and Forest Degradation Renstra K/L : Ministry/Agency’s Strategic Plan (Rencana Strategis) Renja K/L : Ministry/ Agency’s Work Plan (Rencana Kerja) RKP : Development Work Plan (Rencana Kerja Pemerintah) RKPD : Local Development Work Plan (Rencana Kerja Pemerintah Daerah)RKTN : National Level Forestry Plan (Rencana Kehutanan Tingkat Nasional)
Glossary
4.
RPJP Nasional : National Long-Term Development Plan (Rencana Pembangunan Jangka Panjang Nasional)RPJP Daerah : Local Long-Term Development Plan (Rencana Pembangunan Jangka Panjang Daerah) RPJMD : Local Mid-Term Development Plan (Rencana Pembangunan Jangka Menengah Daerah) RPJMN : National Mid-Term Development Plan (Rencana Pembangunan Jangka Menengah Nasional)
Renja SKPD : District Government Work Unit Work Plan (Rencana Kerja Satuan Kerja Perangkat Daerah)Renstra SKPD : Strategic Plan of District Government Work Unit (Rencana Strategis Satuan Kerja Perangkat Daerah)SFM : Sustainable Forestry Management SMI : Sarana Multi InfrastrukturSSLI : Smart Street Lighting Initiative SUTF : Sustainable Urban Transport FundSUTRI : Sustainable Urban Transport InitiativeTDM : Transport Demand ManagementTPA : Landfill TRANSfer : Towards Climate Friendly Transport Technologies and MeasuresTSU : Technical Support UnitUU : National Law Enacted by The Government with the approval of Parliament (Undang-Undang)UNFCCC : United Nations Framework Convention on Climate ChangeVIMSWa NAMA : Vertically Integrated Municipal Solid Waste NAMA3R : Reduce, Reuse, Recycle
5.
Table of Content
6.
73135
121923
27Indonesia’s NAMAFramework and ICCTF’sMitigation Strategy
SSLI NAMA
SUTRI NAMA
Acknowledgement
The IndonesianClimate Change Trust(ICCTF) profile
SWEET NAMA
CEMENT NAMA
VIMSWa NAMA
7.
he Indonesian mitiga-tion action framework is currently progressing with the implementation
of National and Regional Action Plans to reduce GHG emissions (Rencana Aksi Nasional dan Rencana Aksi Daerah untuk Penu-runan Emisi Gas Rumah Kaca, henceforth RAN/RAD-GRK). In 2012, the system for monitoring, evaluation and reporting (MER) of mitigation actions was developed collaboratively with sectors and line ministries. The national GHG
inventory system (Sistem Inventa-sisasi Gas Rumah Kaca Nasional, henceforth SIGN) coordinated by the Ministry of Environment (KLH) was set-up in 2011. In 2013, The Government enacted the Min-isterial Regulation of Ministry of Environment on MRV (Permen LH no 15/2013). The inventories in conjunction with the regulatory framework are the necessary pil-lars for Indonesia’s measurement, reporting and verification system.
Indonesia’s NAMA Framework and ICCTF’s Mitigation Strategy
T
Figure 2 NAMAs as a cornerstone of RAN/RAD-GRK
The RAN/RAD-GRK implemen-tation is aligned with national development principles and pri-orities. RAN-GRK forms the foundation for the development and implementation of NAMAs. NAMAs are thus a cornerstone of Indonesia’s climate change policy to achieve unilaterally the 26% GHG emission reduction target, and an emission reduction of up to 41% with international support.
INDONESIA’S NAMA FRAMEWORK
international sources, thereby leveraging international expertise and funding support to successfully implement projects on the ground. The support is expected to cover the financing, technology transfer and capacity building. The Government of Indonesia is currently preparing NAMAs in various sectors. In order to ensure that NAMAs will effectively contribute to meet Indonesia’s mitigation targets and other national development priorities, the following basic criteria are considered essential:
• NAMAs should be built upon the national mitigation policy framework (RPJPN, RPJMN, ICCSR, RAN/RAD-GRK), and should align with the national development priorities including the national mitigation targets. When the proposed NAMAs are not listed in the RAN/RAD-GRK documents, the proposer shall report to all relevant agencies (sectoral ministries
8.
nternational support via foreign investments and capacity building mea-sures can lead to large
impacts within the implementation of sustainable and climate friendly policies and measures.
International support will support the further implementation of GHG mitigation efforts in various means and provide the needed support in related sectors, such as enhanced transfer and employment of low carbon technologies and improve-ment of related capacities.
Against limited public resources, the need to activate private sector
ICCTF’S MITIGATION INVESTMENT STRATEGY
and/or local governments) for endorsement.
• NAMAs should be consistent with national development goals, and complement existing sectoral policies and programs. In doing so, capacity building measures should be built upon existing initiatives, and international financing opportunities should be used in such a way that will leverage national funding capacity effectively.
• NAMAs should address the development benefits (social, economic, politics, and environmental aspects). The Government of Indonesia primarily strives to advance n a t i o n a l d e v e l o p m e n t programs. In this regard, emission reductions serve as a co-benefit of development. Therefore, the RAN/RAD-GRK also plays an important role to promote low carbon development.
• NAMAs should contribute to the creation of fundamental changes in the national and sectoral policies to achieve low emission development, as well as to foster institutional coordination and innovative collaboration.
• NAMAs should describe the likelihood of successful implementation, and foresee long-term impacts, which demonstrate the immense potential for scaling up and replication.
• A NAMA should estimate the direct and indirect GHG mitigation potentials, and demonstrate cost-effectiveness. Furthermore, i t should relate to the national business-as-usual GHG emission scenario. The undertaken activity should also ascertain future GHG emissions reductions compared to business-as-usual scenarios.
engagement to achieve the over-arching target of GHG-emission reduction has become clear:
The ICCTF as a grant channeling institution will increasingly focus on:
(i) Providing early stage develop-ment support to mainstream yet underutilized or unknown mitiga-tion solutions, thereby improving its outreach to the private sector.
(ii) Position itself as a key channel-ing institution for climate finance, both domestically and internation-ally.
(iii) NAMAs as an important instru-
ment to receive international and national recognition for sector wide mitigation action.
(iv) NAMAs in the Indonesian con-text are an integral component of RAN/RAD-GRK. (v) Indonesia has been one of the first countries worldwide to develop NAMAs. New NAMA development is encouraged, fostering innovation and creativity in mitigation activi-ties.
(vi) The ICCTF will support national NAMAs through its envisioned role as National Implementing Entity for the Green Climate Fund.
I
9.
it igation solutions require innovations, i.e. the development and introduction of
technologies and management models that are new within the Indonesian context specifically related to climate finance.
he ICCTF focuses on the product/project development stage to test technical and
managerial solutions in order to identify the most climate and cost efficient solutions. This includes working out business models as well as analyzing political and regulatory frameworks.
PPPs for example are mainly a type of procurement mode for the public sector, which means they are only
EARLY STAGE DEVELOPMENT RISK MITIGATION
The private financing potential is enormous, but catalyzing investments o f adequate solutions by reducing early stage development risk strengthens private sector interest in any climate relevant projects. Ideally, ICCTF projects can increasingly serve
to pilot, propagate and evaluate mitigation and adaptation solutions that lead to feasible business models that can be later realized through public procurement or market driven schemes.
M
T
Figure 3 Catalyst support of ICCTF in the early stage of the project life cycle
one of the options to implement the tested solutions.
Partnerships are being formed with financing institutions and private investors. The mitigation of early stage development risk is key to trigger private sector collaboration in any projects. Project developers are required to have the qualification and ability to reduce such risk to a minimum. In conjunction with financing partners, investment and financing models
are developed that are replicable, scalable and viable.
Funding can be provided by ICCTF in the form of grants. Such grants cover the financing of feasibility studies, viability gap analyses of green projects (assessment of policy frameworks, assessment of regulatory & institutional framework) and/or monitoring& evaluation tasks. Grants are also an important instrument as to lower capital expenditures
10.
ccording to its defi-nition, a nationally appropriate mitigation action (NAMA) is a vol-
untary measure for mitigating GHG emissions. NAMA implementation can be supported by the imple-menting country or by developed countries.
The support is expected to cover financing, technology transfer and capacity building . They are an important tool to receive inter-national and national recognition for sector wide mitigation action. NAMAs in the Indonesian context are an integral component of RAN/RAD-GRK. Indonesia has been one of the first countries worldwide to develop NAMAs. New NAMA devel-opment is encouraged, fostering innovation and creativity in mitiga-tion activities.
IMPLEMENTATION OF NAMAS AND NAMA PROJECT PIPELINE
A
(i.e. soft loans) to incentivize participation. Another example includes technical assistance and capacity development funds that can be channeled to the relevant target audiences. Such (early stage) funding is often essential to develop business models and financing schemes, train staff, provide guidance and increase awareness about the project’s scope and activities. In hindsight, such technical assistance can turn out to be crucial for the successful implementation of projects.
It thereby provides evidence about the triggering effect such technical assistance and capacity development investments can have for the scaling up activities that follow in later phases.
A central component of ICCTF’s strategy is to enhance its collaboration with the private sector. The objective is that ICCTF funded projects related to RAN/RAD-GRK increasingly enhance
Development partners can sup-port NAMA finance by providing funds to the Ministry of Finance (MoF) or to the ICCTF. A distinc-tion is made between loans and grants. MoF will channel loans while grants are being channeled by the ICCTF. Channeling funds (the receiving and disbursing of grants) - in addition to value added ongoing Monitoring and Evaluation Services - are a key function and core competence of the ICCTF. The ICCTF will actively support the preparation and the implementa-tion of NAMAs, following ICCTF’s prioritized fields of activities. In this role, the ICCTF will work closely with NAMA developers, national and regional authorities, the private sector as well as with other relevant stakeholders.
The ICCTF will support national NAMAs through its envisioned role as National Implementing Entity for the Green Climate Fund. NAMA projects such as Sustainable Wood to Effective Energy (SWEET), Cement, Smart Street Lighting (SSL), Vertically Integrated Munici-pal Solid Waste (VIMSWA) as well as Sustainable Urban Transport Program Indonesia (SUTRI) are existing project proposals that have been co-developed with local governments and relevant line min-istries.
These projects are included in ICCTF’s project pipeline and are described in greater details in this booklet. Illustrated NAMA projects are covering priority areas with a special focus on energy, they also fit within the current sub-sector pri-oritization of the ICCTF.
engagement of private sector companies, promote market-oriented solutions and thereby attracting private investments into GHG reduction.
11.
Table 1, ICCTF’s NAMA Project pipeline Source: Indonesia NAMAs, Ministry of PPN/Bappenas, 2014
5 New suggestions for NAMA proposal
Bio-fuel NAMA Ministry of Energy & Mineral Resources
Chiller NAMA Ministry of Energy & Mineral Resources
Methane Capture NAMA Ministry of Energy & Mineral Resources
Industrial Estate NAMA Ministry of IndustryTextile NAMA Ministry of IndustryCarbon Sequestration & Livelihood Improvement NAMA
Ministry of Agriculture
No Status Activity Implementer1 Getting funds from NAMAs
support facilitySUTRI NAMA Sustainable Urban Transport NAMA
Ministry of Transportation, Bappenas
2 Registered in UNFCCC SUTRI NAMA Sustainable Urban Transport NAMA
SSLI NAMA Smart street Lighting Initiative NAMA
Ministry of Transportation, Bappenas
Ministry of Energy & Mineral Re-sources
3 Proposal is submitted to get in-ternational funds, for instance NAMA support facility
VIMSWa NAMA Vertically Integrated Municipal Solid Waste NAMA
Ministry of Public Works,
Ministry of Energy & Mineral Resources, Bappenas
DEEP NAMA Debottlenecking Project Finance for Least Cost Renewable in Indonesia NAMA
Ministry of Energy & Mineral Resources
SUTRI NAMASustainable Urban Transport NAMA
Ministry of Transportation, Bappenas
SSLI NAMASmart street Lighting Initiative NAMA
Ministry of Energy & Mineral Resources
Cement Industry NAMA Ministry of Industry4 NAMAs proposal being
developedScaling-up RE NAMAScaling-up Investment in Small and Medium Scale Renewable Energy NAMA
Ministry of Energy & Mineral Resources
SWEET NAMASustainable Wood to Energy Effective Technology NAMA
Ministry of Forestry
Green Building NAMA Ministry of Environment, Ministry of Public Works and Provincial Government of DKI Jakarta
Air Transport NAMAs Ministry of TransportationBio-energy NAMA Ministry of Energy & Mineral Re-
sources
12.
he ICCTF is the only national trust fund dedicated to climate finance equipped with
a governmental mandate to support the implementation of Indonesia’s
The Indonesian Climate Change Trust (ICCTF) profile
T
In 2009 the ICCTF was launched by GoI to coordinate and harmonize climate finance
Since 2010 the ICCTF has successfully funded key mitigation and adaptation projects nationwide.
Until 2014 the UNDP has been the interim fund manager for the ICCTF
By 2015 the ICCTF will be a self-managed national trust fund.
Mandiri Bank as ICCTF trustee
Mandiri Bank as ICCTF trustee
2009 2010 2014 2015
mitigation and adaptation goals. National ownership is a key feature and differentiator of the ICCTF in this context. Leveraged finance will play an increasingly important role in future years to finance
programmatic multi-stakeholder initiatives building upon ICCTF’s capacity to channel funds into projects that are of national interest and in line with set mitigation and adaptation goals.
Figure 4, ICCTF in Brief
13.
s a national trust fund, meeting domestic and international fiduciary standards, developing
institutional capacity and advancing private sector participation in climate financed projects are essential criteria for becoming a
widely recognized climate finance institution at home and abroad.
Aligned with this approach, the ICCTF through its highest authoritative body – the Board of Trustees (Majelis Wali Amanat/MWA) – offers development
partners, private sector participants as well as representatives from non-profits, academia and of course representatives from Indonesia’s government the opportunity to directly influence ICCTF’s strategic direction and monitor its performance.
A
uch part ic ipatory multi-stakeholder engagement generates credibility
and builds trust, which in turn is being rewarded by partners,
policymakers and private sector. Partnerships also arise in the South-South context fostering the establishment of the ICCTF as a key player in international climate finance throughout the region.
S Based on these principles and the envisioned role as National Implementing Entity for the Green Climate Fund, the ICCTF is very well positioned to further extend its leadership in advancing climate finance in Indonesia.
Figure 5, ICCTF Structure of Board of Trustees (Majelis Wali Amanat/MWA)
14.
Figure 6 Value added services
Figure 7, ICCTF’s thematic focus
A clear distinction is made between (1) adaptation and (2) mitigation. These two broad support areas are further specified through distinguishing between three to five project types as well as a list
In order to create a clear and visible identity, the ICCTF created a vision around its unique selling propositions. This identity takes into account its governmental mandate to support public policy objectives while directing its attention to attract a wider set of climate finance beneficiaries – including the private sector – to foster a mainstreaming of low carbon activities in line with National Climate Action goals.
The ICCTF is the only Trust Fund ins2tu2on with a legal status to receive donor funds.
Next to project specific monitoring and evalua2on services, the ICCTF offers professional, efficient and transparent grant channeling.
ICCTF’s funding mechanism enhances direct par2cipa2on with development partners, government and private sector.
Direct transfer of funds and direct access to funds are important features aligned with the Paris Declara2on and the Green Climate Fund.
ICCTF will deploy commercial ERP system solu2ons that further increase transparency, reduce processing 2mes and bureaucra2c boIlenecks.
DANIDA is the first development partner that will transfer funds to the ICCTF’s PDA (Bank Mandiri). This first direct transfer to the ICCTF is an important signal to others to follow this example.
of sub-sectors and topics ICCTF is intending to focus on. The goal is develop a relatively small portfolio of project activities, yet a portfolio that has scale.
Regarding project types, sub-sectors and topics to focus on, ICCTF is seeking the strategic dialogue with GOI key stakeholders, private sector, and development partners
15.
ICCTF’S VISION STATEMENT
ICCTF’S MISSION STATEMENT
UNIQUE SELLING PROPOSITIONS OF THE ICCTF
“As Indonesia’s national trust fund, ICCTF will be recognized nationally and internationally as a premiere climate financing portal.”
Through the development of partnerships with governmental institutions, development partners and private sector, ICCTF’s mission are to:
This mission is intrinsically linked with ICCTF’s role as a climate finance intermediary to develop both awareness for climate finance while ensuring sound climate policy to stimulate market demand. It
he ICCTF learned invaluable lessons from the first round of implemented projects
ended in 2011 and the second round of project funding which ends in 2014.
Meanwhile, the picture regarding a unique profile and core competencies of the ICCTF unfolds:
• Strategic relevance: Piloting of managerial and technological innovations that foster the mainstreaming of climate relevant projects, programs and activities.
It is this vision that captures the need for both a scaling up of project activities as much as it directs attention to a new focus on the development of projects
• Contribute to efficient and effective actions in GHG emissions reduction and increasing resilience of the country aligned with sustainable development principles.
• Mobilize, allocate and manage funds that are invested in projects and programs compliant with national and international fiduciary standards
that involve stakeholders from the international development partner, public, private, academia and CSO community.
This inclusive approach demands active participation in project plan-ning and implementation in order to increase efficiency and effective-ness of climate fund spending.
evidences its focus on compliance with standards and procedures that enhance effectiveness and efficiency in all its operations. As a national trust fund, the ICCTF applies valuable lessons learned
to inform policymakers, empower vulnerable populations and stimulate investments in projects to mainstream climate activities throughout Indonesia.
• Multi-stakeholder engagement: Multi-stakeholder involvement (International development partners, Private Sector, Civil Society, line ministries and local governments) in project funding, management and evaluation based on participatory approaches to build consensus in achieving set project outcomes.
• Direct link with National Target: ICCTF is the only trust fund dedicated to support the achievement of National mitigation targets (RAN-GRK) and Adaptation (RAN-API)
• Inclusiveness: International deve lopment par tners , governmental officials, private sector, CSO and academia are all represented in the Board of Trustees. The Board of Trustees, the highest governing body, approves strategic directions, projects and other important decisions.
• Triggering and scaling up initiatives: Channeling and coord inat ion inst i tu t ion for internat ional ly and domest ica l ly supported projects related to RAN/RAD-GRK & RAN-API, entrusted to leveraging public funds
T
16.
with private and international development partner funds into scalable high quality & cost effective projects.
• Climate policy support to foster private sector investments in
climate financed projects: supporting the coordination between private sector interests and public policy objectives thereby fostering application of de-risking public
policy tools and instruments that provide investors greater certainty when making their investment decisions.
Strategic Relevance for The Country in Achieving Public
Policy Objective
•• Piloting innovative and scalable projects.•• Foster mainstreaming of climate action.
•• CSO’s, central and local government, private sector, development partners.
•• Participatory approach to build concensus. in achieving set project outcomes and expectations
•• ICCTF is the only trust fund dedicated to support the achievement of national mitigation and adaptation targets.
•• Interaction between business and government to create PPPs.
•• Supporting policy in mitigation of risk and investment barriers.
•• Multi-membership in Board of Trustees (BoT).
•• BoT provides strategic directions, approves projects and makes other important decisions.
•• Triggering upscaling climate finance by central & local government, development partners, and private sectors.
•• Entrusted to leverage public funds with private and international development partner funds.
Multistakeholders Engagement
Direct Link with National target
Triggering and Scalling Up Initiatives
Inclusiveness
Climate Policy Support to Foster Private Sector
Investment
Figure 8, ICCTF’s USPs
17.
inancial Management a n d M o n i t o r i n g and Evaluation are core services of the
ICCTF. The effective and efficient management of a scalable project portfolio is a complex task.
Based on past successful records of accomplishment in managing complex and innovative projects,
Grant agreements are signed and executed between the donor and Bappenas (the National Planning Bureau) as the Chair of ICCTF’s Board of Trustees (see figure 2 above). The funding flow below depicts different mechanisms on how grants can be channeled by the ICCTF to local governments, line ministries as well as private sector, CSO & universities.
OVERVIEW OF ICCTF SERVICES AND MANAGEMENT COSTS
PUBLIC FUNDING MECHANISMS
F the ICCTF continues to advance its business model to increase private sector participation and leverage public and development partner funds in order to scale up mitigation and adaptation activities.
The ICCTF is a key instrument of the GOI in achieving its mitigation and adaptation targets, supporting both RAN/RAD-GRK as well
Figure 9, mechanisms on channeling to various beneficiaries
as RAN/API implementation. Through leveraging and channeling of domestic resources and international funds into Indonesia’s RAN/RAD-GRK implementation plan, the ICCTF supports Indonesia’s 26% / 41% emission reduction target.
• ICCTF assumes a management cost being charged of 2.5 % for provided fund channeling and financial due diligence services,
• Provided services are accounted as percentage of total funds received/expected, unless otherwise noted.
• Tailored project management plans are developed together with funders which may include additional environmental Monitoring, Reporting and Verification services.
• Due to revised bylaws and SOPs, earmarking certain program and project activities is possible with a minimum contribution of USD $5 million (instead of $10 million).
• ICCTF can only handle grants (no other financial instruments at this time).
18.
Figure 10 illustrates the reporting mechan isms. Af te r g rant agreements are signed and executed (between donor and Bappenas), funds are transferred (without further governmental interference) to an escrow account held by Bank Mandiri, ICCTF’s national trustee. Grants received will be kept separate from any state budget funds the ICCTF might receive.
PT Bank Mandiri, the National Trustee, will act as cashier/payment agent for ICCTF funded
Figure 10, Reporting mechanism on fund transfer to recipients including line ministries, CSOs, private sector and universities
projects and ICCTF as the national trust fund who manages the funds. ICCTF assets are kept separately and are not co-mingled with those of PT Bank Mandiri.
The receipt of international grant funding is registered with the Ministry of Finance (on budget/off treasury). This essentially safeguards that international funds are accounted for by the government (on budget) as received funds, yet it also identifies such funds as being not related to national budget funds (off treasury).
Bank Mandiri acts as holder of funds, not as a fund manager.
Once project funding is approved by the Board of Trustees, contracts with beneficiaries are signed and executed. Subsequently Bank Mandiri creates unique bank accounts for each beneficiary and funds are released according to agreed upon payment schemes (e.g. milestone payments or performance based payments).
19.
Sustainable Wood-to- Effective Energy Technology NAMA increasing access to electricity and improving livelihoods in remote villages nationwide
SWEET NAMA
Project DescriptionMore than 20 percent of the Indonesian population lacks adequate access to electricity. Meanwhile, more than 60 million ha of forested land have been cleared and degraded. Indonesia’s commitment to reduce its GHG emission by 26% by 2020 using domestic resources and an additional 15% with international support shall be implemented through the National Action Plan for GHG Emission Reduction (called RAN GRK).
GoI expects to reduce GHG emission from “energy and transportation” sector by 38 million tCO2 with domestic sources and 56 million tCO2 with international support. 4.5 million tCO2e of GHG emission reductions are expected to be achieved by 2020 through installation of new renewable energy projects.
From within the “forestry and peat-land” sector, GOI expects to reduce 672 million tCO2e with domestic sources and 1.039 Giga tCO2e with international support
by 2020. Among others, carbon sinks are expected to increase as a result of reforestation and afforestation measures covering approximately 18.8 million ha of currently considered degraded land. In order to significantly reduce sectoral GHG emissions, public-private partnerships are needed to mainstream climate action.
Supportive policies like feed-in tariffs, Independent Power Producer permits and fiscal incentives are established; however barriers still exist that prevent renewable energy investments. In the current state, few national banks manage soft-loans for renewable energy investments
and miss out on bankable projects valued at reasonable risks.
SWEET-NAMA strives to reduce risks and overall project costs for owners and banks through the development of bankable feasibility studies.
The SWEET NAMA is a model approach to f inancing the development, implementation, and operationalization of a sector wide program for renewable energy rural electrification.
The SWEET NAMA is in line with the National Action Plan on GHG emission reduction (RAN-GRK) and provincial GHG mitigation
Duration:2015-2020 (planned)
Location:The project will cover four districts (Bangkalan, Pamekasan, Sampang, Sumenep) whereas Bangkalan will be the main project implementation site (center). By 2020, a total of 10.000 ha
of unproductive land in the 4 districts is targeted to be planted with calliandra trees.
Funding request:2015-16 (phase 1): USD$ 5 million for phase 1 (grants) to reduce early stage development risks2016-2020 (phase 2): through up-front grant funding (additional USD 3$ million)
and supplementary (APBN) state budget funds, an additional USD $ 30 million are raised of private sector investments
Phase 1 will focus on activities in the Bangkalan district, covering: • Training staff for gasification technology
20.
action plans (RAD-GRK). It aims at reducing GHG emissions by sequestering CO2 through planting Caliandra on degraded land sites. In addition, GHG emissions are avoided as SWEET replaces fossil fuel as the traditional/conventional electricity source.
Access to electricity is one of the main drivers in the process of sustainable development. The GOI has set national energy targets for 2025, encompassing a shift in the mix toward coal, renewable and gas. Biomass turns out to become a renewable energy champion due to the following factors:
• Sustainable fuel to
generate energy
• Affordable resources • Abundance of available resources
• Available in most areas in Indonesia
• Requires low-tech, low-risk proven technology for power generation.
ICCTF’s pilot project at Bangkalan district on the island of Madura is closing this year (2012-2014). Madura’s grid infrastructure is not sufficient to supply adequate access to electricity which is the reason why villagers depend
on diesel generators. Although challenges still exist, switching from diesel to biomass has been proven to be successful.
As feed stock for its biomass gasification operation Caliandra plants (Calliandra callothyrsus) offer an abundant natural resource that is sustainably harvested and grown. The SWEET NAMA applies lessons learned from the Madura pilot project making use of proven, low-risk biomass gasification technology generating clean energy in rural locations.
SWEET aims to scale up wood pellet production which can be sold to domestic and foreign markets or used to generate electricity at the community. In the initial implementation phase self-sufficiency is the goal (100% community access to biomass generated electricity), at an advanced project stage, oversupplies will be sold to PLN, the state owned utility, through Power Purchase Agreements, where feasible.
Lessons learned from the pilot project suggest that further capacity development and technical assistance is needed. Such assistance to scale up project activities can be categorized into technical assistance and project finance.
• Optimize business models • Installing gasification technology• Social and ecology assessment of four other sites
Phase 2 will focus on up- scaling the Bangkalan gasification project• Creating farmer groups at four districts • Training FMU
(wood estate and gasification)• Creating sustainable wood to energy estates at four site locations • Installing gasification technology.• Implementation of wood based biomass gasification• Impact analysis• Creating national secretariat for Biomass gasification implementation Type of GHG
Emission Reduction Fuel-switch replacing diesel generators (Co2) & increasing carbon sinks. Directed at the Energy and Forestry sector.
Amount of Emission Reductions (CO2e)4.08 million tCo2e by 2020 as a result of Caliandra farming practices (root systems remain intact to act as carbon sink).
21.
Technical assistance include capacity building on community level to train villagers to operate & manage biomass machinery including sale & marketing of wood pellets & generated renewable energy, as well as implementation of short rotation coppice technology to optimize production. In addition, project locations and scale opportunities are being identified and tested.
Financial components include the development of innovative financing mechanisms for climate friendly project investments. Project risk assessments, gap analyses as well as economic viability studies are being conducted to determine financing needs, expected ROI, scale and replicability to foster private sector participation.
Project Outputs (phase 1)The outcomes of the proposed project will be:
Output 1: Strong capacity and technical know-how of local stakeholders in integrating forest management, wood pellet processing, and marketing
Output 2: Private companies invest technology to process post-harvest wood energy estate (two distinctive products i) wood pellets and ii) renewable energy are produced)
Output 3: Optimizing business models of the wood energy estates
are created resulting in bankable feasibility studies including detailed engineering designs and financing schemes which include grants, soft loans, debt and equity funding. Various PPPs are considered including build–operate–transfer (BOT)1 subject to energy and wood pellets sales (domestic and export). Additional options are considered such as BOO (build-own-operate).
The project will cover two ICCTF thematic foci: land-based mitigation and renewable energy. This NAMA offers the potential for transformational change as it supports a nation-wide strategy towards shifting energy production
to biomass gasification.
Project DocumentA dedicated website (www.greenmadura.or.id) was created to provide additional information about the pilot project located on the island of Madura. The Bangkalan district where the pilot project resides is also the center for planned scale activities.
The full length NAMA project proposal is available on ICCTF’s website http://www.icctf.or.id/news/document-and-publication or send us an email at [email protected]
Additional 1.54 million tCo2e by 2020 are avoided as a result of fuel switch activity.
Project Partners
Implementing Partner: Direktorat Perhutanan Sosial under Ministry of Forestry (MOFOR)
Responsible Parties: Ministry of Forestry
Other Partners: private sector, specifically technology providers and investors, financial institutions (domestic and foreign), Ministry of Energy, PLN (state owned utility), technical experts
1 Build–operate–transfer (BOT) is a form of project financing, wherein a private entity receives a concession from the private or public sector to finance, design, construct, and operate a facility stated in the concession contract. This enables the project proponent to recover its investment, operating and maintenance expenses in the project.
Figure 1 The Bangkalan Madura Model Project Activities
22.
Development benefits
• Job creation and improving social welfare.
Increasing community access to electricity, which will provide additional income to villagers, better communication, improved economic development, better job opportunities and in the end increasing social welfare of the community.
• Improving soil on degraded land positively affecting biodiversity and watershed management .
Through the planting of Caliandra, soil in degraded community lands is enhanced and enriched. Through its root systems the capacity of the soil to hold water is improved, whereas the Caliandra bulbs provide nectar for honey bees, among many other benefits. Natural fertilization and improved watershed management also result in supplementary vegetable and fruit harvesting.
• Technical support provided by the NAMA.
SWEET supports GOI’s public policy objective to increase access to electricity for remote and rural populations while reducing GHG emissions.
• Mainstreaming climate action.
Through the improvement of fundamental investment criteria (feasibility, risk evaluation and assessment, legal framework in lieu of incentive schemes) public and private investments are expected to be leveraged.
The Bangkalan Madura Pilot ProjectThe Bangkalan Madura Model Project is a pilot project run by the community. It is a 214 ha Calliandra callothyrsus plantation on community’s unproductive land to supply raw materials for a wood pellet factory owned by the community in the area. The Caliandra is a type of energy crop, suitable grown on degraded/unproductive land and is able to fertilize the soil.
Contact1. Dr.Machfudh, Forestry Climate Change Working Group Secretariat. E-mail: [email protected]
2. Dr. Yetti Rusli, Head of Forestry Climate Change Working Group, Ministry of Forestry. Email: [email protected]
Postal address:1. Direktorat Perhutanan Sosial. Gedung Manggala Wana Bhakti Blok I, Lantai 14, Jalan Gatot Subroto Sunayan, Jakarta Pusat
2. Sekretariat Pokja Perubahan Iklim Kemenhut. Gedung Manggala Wana Bhakti Blok VII, Lantai 6, Jalan Gatot Subroto Senayan, Jakarta Pusat
Positive impacts of the pilot projects have been identified, including (1) rehabilitation of degraded land and enrichment of soil, (2) reduce flood and landslide in the area, (3) more spring water found in the area (higher water tables), (4) improving welfare through economic and social quality improvement, (5) climate change mitigation through carbon sequestration through Biomass Energy Estate and the substitution of fossil fuel with wood pellets, (6) multiple beneficial effects of local economic development.
23.
Reducing CO2 and Closing the Waste Gap; Encouraging Waste-to-Energy in the Indonesian Cement sector
Cement NAMA
Project DescriptionAccording to the National Action Plan, industry sector shall reduce 1 million tCO2 (without international support) or 5 million tCO2 (with international support) over the period 2010 to 2020. In early 2012, Ministry of Industry (MoI) released a roadmap on CO2 emission reduction for the cement industry to encourage the companies. The cement sector experienced a growth of 237% over the period 1999 to 2013 resulting in the production of 103.7 million tons cement in 2020 (approximately 69 million tCO2 business as usual (BAU) in 2020).
Mitigation measures in the cement sector are energy efficiency (EE), alternative fuels and raw materials (AFR) and blended cement. The Cement NAMA will focus on AFR as waste-to-energy measure in the sector. The project aims to reduce CO2 emissions by decreasing the coal consumption and increasing
the use of alternative fuels from industrial and municipal solid waste.
The cement sector is expected to reduce 3.8 million tCO2 until 2020 from this measure. Currently, three cement companies have started to construct facilities to support AFR use from waste running in low-capacity. Considering the complex issues in taking such initiative (high investment and high risk due to non-established
waste management system in Indonesia), AFR projects in cement companies are seen less attractive than other mitigation measures or business-as-usual. Through the Cement NAMA, it is expected that AFR project attractiveness will be improved.
By carrying out the Cement NAMA, it will encourage the replacement of coal as primary fuel in cement production as well as the improvement of the waste
Duration: 2015-2018 (planned)
Location:All cement companies in Indonesia. Current pilot implementation in PT. Holcim Indonesia, Tbk, Narogong Plant, West Java
Project budget:Full costs of implementation: EUR 2.063 mio. Budget sought from international sources: 2.063 mio EUR for technical assistanceCurrent year budget: n/a
Type of GHG Emission Reduction:Industrial Sector
Amount of Emission Reductions (CO2e) 3.8 mio tCO2 until 2020
24.
management system in Indonesia. Significant emission reduction from coal replacement combined with methane avoidance from current waste management practice will result in a double-decker emission reduction. This will be the added value to the overall NAMA.
Project Output
1. Increased technical know-how of cement plants in Indonesia to use AFR. The project will
develop technical guidelines, MRV schemes, trainings on the technical guideline and standards to comply with HSE regulations.
2. Increased the share of municipalities and companies f rom industr ia l sector participating in feedstock supply for the use of AFR in cement plants. The project will conduct several analysis and studies to support and promote the use of MSW in cement plants
and awareness raising dialogues, network meetings and workshops with industries.
3. Adapted waste policies, incentives and legal framework to improve utilization of AFR. The project will conduct several assessments on permit issuance and potential economic incentives.
4. Increased AFR project attractiveness. The project will develop bankable feasibility studies including detailed engineering design and facilitate project financing scheme to financial institutions with concession for cement industries and municipalities.
Project Document(s)Cement NAMA Information Note
The full length NAMA project proposal is available on ICCTF’s website http://www.icctf.or.id/news/document-and-publication or send us an email at [email protected]
Thematic Area: Waste-to-energy
Development benefits
• Improvement of Waste Management and Pollution Prevention.An increased alternative fuel uptake by the cement production process will reduce the amount of solid waste to be disposed of. The Cement NAMA may therefore contribute to reduce these negative
Project Partners:
Implementing Partner: Center for Assessment on Green Industry and Environment (PPIHLH) under Ministry of Industry
Other Partners: Ministry of Environment, Indonesia Cement Association (ASI), PT. Holcim Indonesia Tbk, Indonesia Business Council for Sustainable Development (IBCSD)
25.
environmental impacts and may in general improve solid waste management.
• Job Creation The NAMA project will support the development and uptake of AFR. This will lead to the creation of new value chains, and therefore new employment possibilities for the collection, preparation and transportation of AFR.
• Technical Support Provided by the NAMA The cement NAMA shall support the cement sector in exploring and developing economically attractive, low carbon technologies in using AFR. The provision of technical support to the cement companies, MoI and other stakeholders will be a key element.
PT Holcim Indonesia’s “GreenZone” waste processing facility will be the flagship of it’s Geocycle business unit. This facility is currently under construction and is expected to be operational in October 2014. This facility, a state-of-art industrial waste processing facility will enable Geocycle to serve a wide range of industrial sectors.
This facility is a much needed addition to the industrial waste management infrastructure in the country; closing the waste gap to prevent pollution and provide a safe and environmentally friendly solution to industries.
The GreenZone facility will provide the following environmental contribution:
• Manage up to 160,000 tons of industrial waste annually, turning waste to a resource.
• Reduce approximately 90,000 tCO2 equivalent per year.
The GreenZone facility is equipped with the best available technology for processing waste. Additionally, it sets the standard in the sector for safety and environmental protection. It is expected that this facility shall be a showpiece in South East Asia we can all be proud off. For Holcim and Geocycle, this is a significant step towards further efforts to contribute to the growth of green economy and to support the Indonesian government CO2 roadmap.
Key success factors:• Experience – Holcim and Geocycle has built up
significant experience in providing services to industries in Indonesia. Holcim’s reputation in safety and exceeding environmental regulatory requirements has gained the confidence of the customers and partners.
• People – Holcim and Geocycle comprise of dedicated professionals who are well trained and passionate in caring for the environment. This is a key factor for the success.
• Commitment to Sustainable Development – Holcim Indonesia continues to focus on its sustainability efforts. The GreenZone facility is an example of this commitment. As a founding member of Indonesia Business Council for Sustainable Development (IBCSD), Holcim through its Geocycle business unit is keen to extend a hand to other industries to assist in finding sustainable solutions for their waste streams through this route. • Support and encouragement from the Ministry of Industry and Ministry of Environment to encourage further growth in this sector while maintaining good environmental standards across all industry sectors.
• Adaptation of National Regulations and Procedures In order to promote low carbon technologies in the cement sector in Indonesia, it will be necessary to amend various regulations for the use of AFR. By improving the quality of fundamental investment criteria (feasibility, risk assessment, transparency, and legal framework) private and public capital investments are expected to be leveraged.
Progress of implementation of a New Waste Pre-processing Facility to support Waste-to-Energy Efforts in PT. Holcim Indonesia Tbk (Narogong Plant)
26.
Contact Person:Dr. Ngakan Timur Antara, Head of Center for Assessment on Green Industry and Environment (PPIHLH). Telephone +62 21 525 2746 Telefax +62 21 525 2746Website http://www.kemenperin.go.id
ContactMinistry of Industry (MoI)Agency for Industrial Policy, Business Climate and Quality Assessment (BPKIMI)
Cement plantSource: PT Holcim Indonesia Tbk
Study Trip on Development of NAMAs in Cement Industry (Germany, June 2014)
Study Trip on Development of NAMAs in Cement Industry (Germany, June 2014)
Workshops and Training on Calculation of GHG Inventory in Cement Industry (2013)
27.
Vertically Integrated Municipal Solid Waste NAMA in Indonesia
VIMSWa NAMA
Project DescriptionThe Waste sector contributes around 9 to 11% to Indonesia’s total greenhouse gas (GHG) emissions and the amount is rising through population growth and economic expansion. This sector is one of the five priority areas of the national and local action plan on GHG emission reduction (RAN-GRK and RAD-GRK).
M u n i c i p a l S o l i d Wa s t e Management (MSWM) in Indonesia is a responsibility of the local governments. However, sufficient involvement of the national and provincial governments is required to support the local governments in improving the quality of MSWM practices.
The Vertically Integrated Municipal Solid Waste (VIMSWa)-NAMA is a climate change program with a MSWM focus. The program integrates the vertical government
levels (national, provincial, and local) that fill identified gaps in the Indonesian MSWM-system to transform waste into valued products and a job-creating commodity that contributes its full share to GHG mitigation. The project provides an entry point to address climate change impacts related to MSWM and acts as a replicable model for the implementation of RAN-GRK and RAD-GRK.
The results wi l l lead to transformational change in MSWM mainly by promoting a paradigm shift from “collect-transport-dispose” to the 3R (“reduce-reuse-recycle”) concept that focuses on waste minimization. It also includes performance based finance transfer mechanisms from national to local level, mutual development of GHG reducing investment and capacity building projects of national and subnational governments.
Duration2017-2021
LocationKendari, Jambi, Pekalongan, Malang, Sidoarjo
Project budgetFull costs of implementation: Approximately 40 mio EURO
Expected budget sought from international sources: Approximately 15 mio EURO (grants)
Type of GHG Emission ReductionMunicipal Solid Waste Sector
Potential Amount of Emission Reduction 350.000 tCO2eq per year in 2021
28.
This vertically integrated approach helps coordinating various activities in the sector and to capture their positive climate mitigation impact. It opens windows for private sector engagement in the Indonesian solid waste management sector and leverages additional public budgets for an improved waste management system.
The following activities are planned in different phases of MSWM:
• I m p r o v e m e n t a n d / o r const ruct ion of waste management infrastructures;
• D e v e l o p m e n t a n d establishment of locally appropriate more climate friendly financial instruments and incentives ;
• Capacity building on climate friendly waste management practices for decision makers
and implementing agencies;
• Strengthening MSWM institu tions;
• Engaging private sector participation;
• Education and awareness rising for communities;
• Accompanying technical assistance, especially for measures on national level (MSWM regulation, MRV);
The project is piloted in five locations (Kendari, Jambi, Pekalongan, Malang, Sidoarjo) with the view to establish mechanisms that can be replicated nationwide.
The VIMSWa-NAMA particularly supports the National Program of Ministry of Public Works to provide MSWM services for slum areas. It has very high sustainable development impacts, such as improving health, increasing income generation, poverty reduction, as well as environmental and social co-benefits.
PartnersMinistry of National Development Planning (BAPPENAS) is expected to be the executing agency that also includes overall coordination of this project. Ministry of Public Works (MPW), Ministry of Environment (MoE), Ministry of Home Affairs (MoHA) and Ministry of Energy and Mineral Resources (MEMR) that have an authority for
(after all investment measures are implemented)
Project PartnersMinistry of National Development Planning (BAPPENAS),Ministry of Public Works,
Ministry of Environment, Ministry of Home Affairs, Ministry of Energy and Mineral Resources,Provincial and Local Governments at the Pilot Locations,Private sectors and Other institutions
29.
Waste-to-Energy as well as the subnational governments at the pilot locations are expected to be the implementing agency.
Alignment with other projectsThe VIMSWa-NAMA project is closely aligned with the solid waste program „Emissions Reduction in Cities – Solid Waste Management“, currently under implementation and financed by the government of the Republic of Indonesia, KfW and SECO. It includes the construction of sanitary landfills in 5 municipalities (4 of them overlapping with the 5 VIMSWa-NAMA pilot municipalities) including sorting and composting facilities, landfill gas extraction & flaring and leachate collection & treatment facilities and capacity building for municipalities (accompanying measures).
Out of the overall investment budget of approximately 100 Mio. EUR, KfW provides on behalf of the German government an interest reduced loan of 75 Mio. EUR; SECO finances the accompanying measures in the amount of 7.6 Mio. EUR.Project OutputsVIMSWa-NAMA and the “Emission Reduction in Cities – Solid Waste Management” program consists of Financial and Technical Components.
Financial component
1: With the above mentioned concessional loan from KfW, the Indonesian government supports the construction of five sanitary landfills, including composting and sorting facilities, of which are 4 being located in VIMSWa-NAMA pilot municipalities.
2: The Indonesian national government in cooperation with
the sub-national governments develops a performance based funding mechanism for climate-friendly MSWM-infrastructure and equipment for local governments.
3: The five pilot municipalities test the mechanism by investing in defined and custom-made infrastructure and equipment projects which include:
• Increasing service coverage including provision of MSWM collection and transportation vehicles;
• 3R activities and composting, including home-recycling and home-composting and solid-waste-bank;
• Anaerobic digestion;
• Sanitary landfill with Landfill Gas (LFG) capture, including, flaring, direct use of LFG and LFG to electricity conversion (Waste-to-Energy);
• Reduction of open burning and open dumping.
4: In an additional phase, the financing mechanism could be rolled out and replicated in other municipalities.
Technical component 1a: Accompanying measures on municipal level will be carried out by KfW in 4 out of 5 VIMSWa-NAMA pilot municipalities with the purpose of - among others - supporting the Institutional and organizational strengthening of the municipal and regency departments responsible for the management and operation of SWM services and facilities, reaching more cost-efficient operation and maintenance and at the same time supporting the municipalities to increase their
MSWM-budget (from retribution, fees, incomes) and strengthen the municipal financial management system.
1b: Similar measures will be carried out in Kendari, not being part of the “Emissions reductions in cities program” of KfW.
2: On the national level, accompanying measures include review and update of existing laws and regulations and the improvement of horizontal cooperation between different line ministries engaged in a mutual effort to reduce GHG emissions.
3: The technical component also covers the set-up of a MRV-system for the MSWM-sector: First the MRV-system will be developed. Second, the MRV-system will be piloted and tested with the activities carried out in the five pilot municipalities but also for the KfW-supported sanitary landfill investments. Third, the MRV-system will be applied to other interventions in the MSWM-sector in Indonesia, so that their GHG mitigation effect can contribute to the achievement of the voluntary mitigation target. This MRV system will be in line with the MER (Monitoring Evaluation and Reporting) system developed by BAPPENAS and the MRV system developed by the Ministry of Environment.
Project Document(s):VIMSWa-NAMA Information Note.
The full length NAMA project proposal is available on ICCTF’s website http://www.icctf.or.id/news/document-and-publication or send us an email at [email protected]
30.
Contact Person Ir. Muhammad Maliki Moersid, MCP. (Director of Environmental Sanitation Development)Postal Address : Jl. Pattimura No. 20 Jakarta Selatan, 12110, IndonesiaTelephone : +62-21-72797175, Fax : +62-21-72797175Email : [email protected]: www.ciptakarya.pu.go.id | www.pu.go.id
Contact:Ministry of Public Works Indonesia (MPW)Directorate General of Human SettlementDirectorate of Environmental Sanitation Development
Solid Waste Bank (Malang)Sampling on Baseline Study of GHG Emission Potential (Pekalongan)
Development benefitsBesides strengthening local institutions and improving vertical integration and coordination between different levels of governments, the Project creates the following sustainable development co-benefits:
• Environmental: reducing virgin material extraction from natural sources, avoidance of uncollected waste dumping in open fields, rivers, and uncon t r o l l ed b u rn i n g , replacement of fossil fuel due to use of renewable energy from LFG, generating compost) and ultimately a significant reduction in GHG emissions;
• Economic: additional income for local budgets from better landfill management and waste bank, creating working opportunities, saving energy
costs, extend the lifetime of the landfill, supporting promotion of environmental values such as clean and green housing that will have a positive impact on the price of their land, trigger economic growth and spread the perception of the city as more modern and competitive;
• S o c i a l : c o m m u n i t y involvement, educat ion and awareness raising, improving community health, improve working and living conditions for informal sector, safety, aesthetic aspect and cleanliness.
Mitigation and financial ambitionThe VIMSWa-NAMA project has an overall budget of around 40 Mio. EUR in the five pilot municipalities (including the activities carried out under the “Emissions reduction in cities”-
program of KfW). The potential GHG emission reduction from the proposed mitigation actions of the five pilot municipalities is expected around 350,000 tCO2eq per year after all investment measures are implemented (including the mitigation effects from the KfW activities).
The proposed f inanc ing requirement expected from the international sources (grant) that cover some portions of planned project activities (as written in project description) would be around 15 Mio. EUR (grants). A relevant share of overall costs could be covered by matching contributions from Indonesian public sources, especially the national budgets. Given the tightness of local budgets and the limited user contributions (fees), these sources will be mobilized once a cost recovering retribution is established.
31.
Smart Street Lighting Initiative
SSLI NAMA
Duration:2015-2020
Location:up to 22 targeted cities (under three phases: pilot phase, scaling up phase
and transformation phase)
Project budget:Full costs of implementation: USD 294 million Budget sought from international
sources (grants): 19 mio $USD (11.5 million USD for technology investments and 7.5 million USD for technical assistance).
Project Description Energy efficiency has been one of the main policies of the Government of Indonesia in developing a more sustainable energy infrastructure. With a target of energy elasticity less than 1 by 2025, energy efficiency along with renewable energy is an important tool to reduce dependency on fossil energy.
However, many Indonesian cities do not efficiently operate public street lighting systems, despite many low/medium cost opportunities for energy and cost saving through improved street lighting infrastructure/ management and energy efficient street light fixtures.
Light emitting diodes (LED) alone could generate up to 60% in energy savings compared to conventional lamps, in optimal conditions. Several barriers hamper actions towards energy efficient street lighting: 1) partially applied lump-sum electricity billing practices
2) insufficient metering in many cities and 3) lack of awareness on beneficial financial calculation for investment on efficient lighting technologies.
The Smart Street Lighting Initiative (SSLI) NAMA is a program led by the Ministry of Energy and Mineral Resources (MEMR) with the assistance of GIZ which aims at reducing GHG emission by increasing the level of energy efficiency of street lighting systems
in Indonesian cities, including through substitution to LED. The SSLI NAMA is in line with RAN-GRK and several provincial RAD-GRK.
This NAMA offers the potential for transformational change as it supports a nation-wide strategy towards energy efficient street lighting by removing regulatory, financial and capacity barriers to investment into energy efficient street lighting. The NAMA aims at
32.
Type of GHG Emission Reduction:Direct
Amount of Emission Reductions (CO2e):425.000 tCO2 in 2020
Project Partners:Implementing Partner: Directorate General of New, Renewable Energy and Energy Conservation (DG-NREEC) under Ministry of Energy and Mineral Resources (MEMR)
Responsible Parties: MEMR, GIZ
Partners: PIP, ESCOs
triggering broader implementation for financing through the Ministry of Finance’ Indonesia Investment Agency (PIP) and create a larger energy service company (ESCO) market.
The SSLI is the second officially-registered NAMA of the Government of Indonesia at the UNFCCC NAMA registry following the Sustainable Urban Transport Initiative (SUTRI) NAMA.
Within this NAMA, it is expected that the ICCTF will administer international NAMA support (financial funding share).
Project Output
1. Capacity of SSLI partner cities to manage (finance, install, maintain and monitor) energy efficient street lighting is enhanced. The project will offer designed capacity building
measures, e.g., training modules on energy street lighting system, installation and maintenance, MRV etc., to street light authorities.
2. Financing proposals (PIP, international finance) to finance more energy efficient street lights (i.e. LED) are available and endorsed by the city government. The current financial planning foresees that from 2016 forward, local governments will access 30.000.000 EUR as concessional loans from PIP. A Technical Support Unit (TSU) to be established in MEMR will support the local governments in preparing proposals to access PIP loans and additional funding sources from international donors, ESCOs and banks.
3. Draft product performance and safety standards for LED street lights are available and endorsed. The TSU will provide technical support and advice to the relevant ministry (Ministry of Industry, and/or MEMR) for the establishment of energy efficiency performance and safety standards for efficient lighting products at the national level.
4. Strategy on ESCO contracting for public street lighting is available. The output will help to overcome existing barriers for contracting ESCOs by providing advice to local governments interested in entering in contracts with ESCOs.
33.
5. Agreed plan with PLN and the municipal street lighting authority on metering of street lighting. Through workshops and close consultation with PLN and municipal street lighting authority, the TSU will set the conditions for a rapid switch towards full metering of street lighting in Indonesian cities.
Project Document(s)SSLI Implementation Plan: http://www.paklim.org/library/publications/?did=97 SSLI proposal to NAMA Registry seeking support for implementation: http://www4.unfccc.int/sites/nama/SitePages/Home.aspx (ID no: NS-89 Smart Street Lighting Initiative)
The full length NAMA project proposal is available on ICCTF’s website http://www.icctf.or.id/news/document-and-publication or send us an email at [email protected] Thematic Area: Energy Efficiency
Development benefits:
• Energy security of supply (reduced electricity load) and electrification (by freeing up existing and new capacity for extension of the network)
• Cost savings for local governments in the long-term that means budget allocations can be used for other purposes (e.g. health, education, infrastructure improvements)
• Long-term job creation, particularly in the following fields: installation, periodic maintenance, repair services, auditing services and generally service providers (e.g. ESCOs) for energy efficiency
technology and finance – these are particularly important given the lack of qualified experts in the field of energy efficiency.
• Improved quality of living (improved night-time safety, improved visibility for drivers and pedestrians, improved overall appearance of the neighborhood)
The contrast difference between a typical LED and a typical HPS
An example of different street light technologies in Malang city
USD $100,000 from USAid ICED for pilot SSLI in Makassar has been granted to PT Wahana Metrika as the implementer of the SSLI pilot with the support of GIZ Paklim. The activity is a replacement of 77 street light units to LED in Jl Haji Bau, Jl Penghibur and Jl Pasar Ikan, during 12 May – 12 Nov 2014. Currently, these streets are running on HPS street light (250w) which will be replaced by LED (120w).
This activity is the first activity within the SSLI, intended to fur-ther showcase the feasibility of expanding LED street lighting to other cities targeted by the SSLI NAMA and to encourage them to join the initiative.
Makassar has good street light management with almost full cov-erage of metering, a regularly up-dated city street light information system and regular monitoring mechanism in place. By integrat-ing Makassar in the SSLI NAMA Program, it will allow immediately evident energy and cost savings from meter reading and electric-ity bill.
The SSLI NAMA will ensure gen-der-balanced participatory ap-proach to ensure that the concerns of both men and women in street light are captured, through survey and FGD.
34.
Current street lighting in Jl Penghibur, Makassar, to be replaced with LED under SSLI
Contact Person: Mrs. Maritje Hutapea, Director for Energy Conservation, Ministry of Energy and Mineral Resources, Directorate General of New and Renewable Energy, and Energy Conservation. Telephone +6221 31924590 Telefax +6221 31924590Website: www.ebtke.esdm.go.id
Contact:Ministry of Energy and Mineral Resources (MEMR) Department Directorate General of New and Renewable Energy, and Energy Conservation (EBTKE)Postal Address Jalan Pegangsaan Timur No. 1A, 10320 Jakarta, Indonesia
Another pilot implementation of the SSLI is the Streetlight Energy Efficiency Information System in Surakarta (June-Nov 2014). The project is funded by the ICCTF and implemented by the Academy of Industrial and Mechanical En-gineering (Akademi Teknik Mesin Industri) Surakarta, and supported by GIZ Paklim.
The activity establishes a street-light energy efficiency master plan and computer-based information system. Surakarta has consis-tently high monthly electricity bill for public street lighting, which has resulted in an inability to pay to the State Electricity Company in the
past. The focus of SSLI NAMA in Surakarta also aims to build aware-ness of energy efficiency in public street lighting and to encourage the city government to switch to energy efficient lighting technology.Within the context of SSLI, MEMR and GIZ Paklim actively promote the importance and the benefits (including financial benefit) of en-ergy efficient street lighting to cities and facilitate discussion with PIP and ESCO to ease access of PIP financing and ESCO cooperation, through a series of workshops held since the finalization of the SSLI Implementation Plan in November 2013.
Implementation Progress of SSLI
35.
Sustainable Urban Transport
SUTRI NAMA
Project Description ICCSR (2010) reported that the transport sector in Indonesia emitted 25% of all energy-related emissions in 2010 (91% in road transport). Considering that rapid population growth is expected to reach 15% in 10 years, and 66,6% of the Indonesian population is expected to be living in urban areas by 2035, cities will need to cope with highly increasing transport demand.
Over the next 25 years, vehicle ownership is projected to more than double. Mobility is essential for economic and social well-being, but car-oriented development leads to congestion, air pollution, accidents, noise and increasing fossil fuel dependence.
Since the decentralization process began in 1999, cities are responsible for urban transport infrastructure and services. However, most local governments lack knowledge of integrated
transport planning as well as required investment funding for sustainable transport systems. As of today, there is no structure to technically and financially support local governments in developing sustainable transport systems. During the 2009 G-20 Summit, the Government of Indonesia committed to a 26% greenhouse gas reduction by 2020 from “business as usual”, and to 41% with international support. NAMA SUTRI (NSP) aims to transform urban transport in Indonesia with a mix of capacity-building and investment measures provided
through a national urban transport program.
This includes (1) the establishment of a Technical Support Unit providing technical guidance and capacity development for local governments, and (2) the development of an effective funding mechanism to co-finance the implementation of public transport and transport demand management projects. In 7 pilot cities, the NSP will develop a (3) project pipeline of eligible demonstration projects and co-finance (4) the implementation of demonstration projects in up to 5 cities (e.g. bus fleet investment,
Duration:2015-2019 (planned)
Locations:Medan, Batam, Palembang, Bogor, DI Yogyakarta, Solo, Manado
Project budget:Full costs of implementation: 31 million Euro
Budget sought international sources: 14 million Euro
(8,5 million Euro for investments and 5,5 million Euro for technical assistance)
Current year budget: n.a.
36.
improvement of public transport corridors, parking management, pedestrian programmes).
In order to monitor and increase transparency on the achieved impacts, the NSP will establish an (5) MRV system that initiates systematic monitoring of urban transport development which is urgently needed for effective decision making.
In this way, the NSP will pave the way for a transformational change in urban transport policy in Indonesia by creating effective pathways for public and private
investment in urban transport infrastructure and rolling stock. NSP will also create best practices that can be up scaled in more cities in Indonesia.
Additionally, the NAMA creates various co-benefits including equitable access, reduced air pollution and increased life-quality.
The expected mitigation impact of NSP will be achieved through demonstration projects that will lead to a shift of passengers from private cars and motorbikes to busses and non-motorized transport and to improved energy-efficiency of
public transport systems. Based on one low- and one high-impact scenario, the direct mitigation impact of the NAMA Support Project is estimated between 0,7 – 1,3MtCO2e per year in 2030. This estimation refers to emission reductions in five pilot cities that are directly related to the measures implemented under NSP. However, the overall mitigation impact goes far beyond the five pilot cites.
The indirect mitigation impact is expected to be significantly higher, but it depends on several external and currently unknown factors, such as the number of cities that will benefit from the national urban transport program. The inhabitants of the five pilot cities amount up to 13.3 Mio, while the whole urban population in Indonesia is estimated to grow up to 197 Mio inhabitants by 2030.
The implementation will take place in two phases with a foreseen overlap of 6 months: 1. Fast Start (2015-2016): The objective of this phase is to start implementing physical measures in pilot cities, to establish a Technical Support Unit in the Ministry of Transportation and to prepare a mechanism for the co-funding of demonstration projects.
2. Mainstreaming & Sustainability (2016-2019): The objective of this phase is to operate the Technical Support Unit and gain first
Type of GHG Emission Reduction:Direct and indirect
Amount of Emission Reductions (CO2e)0.7-1.5 Mt in 2030
Project PartnersImplementing Partner: Ministry of Transportation, Pilot Cities Responsible Parties: Ministry of Tranportation, Bappenas, Ministry of Finance, GIZ
Partners: ICCTF, possible bank
37.
experiences with the new funding mechanism by implementing demonstration projects. Since the national programme is designed as a permanent support structure, it is important to ensure that the system is self-sustaining (personnel, funding, operational procedures).
Project Output 1. A Technical Support Unit is providing technical guidance and capacity development for the preparation and implementation of public transport projects and transport demand management to local governments.
2. A funding mechanism to support public transport projects and transport demand management (TDM) in cities has been set-up and pilot tested for funding measures in at least 5 of the 7 pilot cities. 3. A pipeline of public transport and transport demand management projects, consolidated with political partners and ready to be implemented during and beyond the lifetime of the NSP exists.
4. Demonstration projects of improved public transport and transport demand management that serve as a good practice for replication have been implemented in the pilot cities and disseminated.
5. A consistent system for the monitoring, reporting and verification (MRV) of emission reductions and co-benefits of urban transport development projects is in place and applied by national and local implementation partners.
Project Document(s)SUTRI NAMA Concept: [http://transport-namas.org/wp-content/uploads/2014/05/Case-Study_Indonesia.pdf]
SUTRI NAMA proposal to NAMA Registry seeking support for implementation: [http://www4.unfccc.int/sites/nama/_layouts/un/fccc/nama/
SUTRI NAMA proposal to NAMA Facility selected for in-depth appraisal: [http://nama-facility.org/projects/projects-selected.html]
The full length NAMA project proposal is available on ICCTF’s website http://www.icctf.or.id/news/document-and-publication or send us an email at [email protected]
Thematic Area: Transport
Development benefits • Reducing negative externalities
of motorised transport in order to contribute to prosperity and
economic development.
• Contribute to better walkability in cities, restrict the use of motorised vehicles and improve accessibility to public transport to improve life quality and create better investment conditions.
• Contribute to reducing local air pollutants that lead to a positive effect on health cost.
• Reduce env i ronmenta l damages and social inequalities through better mobility options for the poorest, better access to jobs and public services, and reduced travel expenses
• Increase the effectiveness of local budget spending through better monitoring and increased transparency in decision-making, which reduces the potential for corruption
• Successful pilot projects are also expected to create a spillover effect and provide incentive for other municipalities to plan and implement SUT projects
• cross-sectoral benefit from the successful implementation of the Support Project can also encourage further NAMA proposals in other sectors.
Angkot in Batam
Baseline Condition in Pilot Cities:
Pedestrian condition in Medan
38.
Angkot Supply in Manado Palembang BRT: Integration with Water Transport and Railway
Contact Person: Mr. Imam Hambali, Director of Centre for Partnership and Transportation Service - Pusat Kajian Kemitraan dan Pelayanan Jasa TransportasiTelephone: +6221 3811301 , Telefax: +6221 3852671Website: http://www.dephub.go.id/
Contact:Ministry of TransportationCentre for Partnership and Transportation Service - Pusat Kajian Kemitraan dan Pelayanan Jasa TransportasiPostal Address: Jalan Medan Indonesia Barat No. 8 Jakarta Pusat 10110
The development of the Project Profiles for ICCTF COP in Lima, was coordinated by the Ministry of National Development Planning (BAPPENAS) particularly under the Directorate for Environment, Deputy for Natural Resources and Environment. A series of discussions involving the relevant line ministries/institutions, and experts have been carried out to prepare the project profiles. It is our pleasure to extend our gratitude to all parties involved in the project profiles development from the start to its completion.
The development of this Project Profiles was supported by
Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) in cooperation with Indonesia Climate Change Trust Fund (ICCTF). Their support is gratefully acknowledged.
Acknowledgements
Supported by:
ICCTF Secretariat Wisma Bakrie 2 Building, 20th floor,Jl. H.R. Rasuna Said Kav. B-2, Jakarta 12920 IndonesiaPhone : (62-21) 5794 5760 Fax : (62-21) 5794 5759email: [email protected] , www.icctf.or.id,
Related Documents
