Indonesia Climate Change Trust Fund

Summary

The Indonesia Climate Change Trust Fund (ICCTF) is a national funding entity which aims to develop innovative ways to link international finance sources with national investment strategies. Created by the Government of Indonesia (GOI), it acts as a catalyst to attract investment and to implement a range of alternative financing mechanisms for climate change mitigation and adaptation programmes. The ICCTF receives non-refundable contributions from bilateral and multilateral donors. The main funding mechanism of the ICCTF is the ‘Innovation Fund’, which provides grants to line ministries to support climate change related projects within the GOI.

Basic Description

Name of Fund	Indonesia Climate Change Trust Fund (ICCTF)
Official Fund Website	http://www.icctf.or.id/
	Date fund proposed: September 2009 Date fund made operational: Pre-project assessments were undertaken in September 2010, which indicate the start of ICCTF’s operations.
Proposed Life of Fund	Unknown.
Administrating Organisation	The ICCTF is administered by Indonesia’s National Development Planning Agency (BAPPENAS). During its preparatory phase (2010–2014), the United Nations Development Programme (UNDP) served as the interim Trustee. In 2015, the ICCTF transitioned to a nationally managed trust fund, appointing Bank Mandiri as the national fund manager, thereby achieving full national ownership and management of climate finance.
Objectives	The ICCTF aims to: Achieve Indonesia’s goal of a low carbon economy and greater resilience to climate change Enhance the GOI’s effectiveness in the leadership and management of addressing climate change. The design of the ICCTF is to be implemented in two stages: In the first step, the ICCTF will be created as an “Innovation Fund”, which involves grant funding (mainly public finance) from development partners and other contributors to be used for activities without financial returns. At a later stage, the ICCTF may advance by establishing a “Transformation Fund” which involves available funding such as public-private partnerships, loans, and world capital market sources that could harness private-sector finance. The introduction of a carbon market is also under consideration.
Activities Supported	ICCTF focuses on 3 priority windows: Land Based Mitigation – The reduction of GHGs emissions from deforestation and forest degradation, while moving towards efficient land uses and sustainable management of forest resources. Energy Contribution to the improvement of energy security in Indonesia and reduction of emissions from the energy sector. Adaptation and Resilience – Preparation of Indonesia’s national and local institutions, as well as vulnerable communities, to the impacts of climate change.
Conditions and Eligibility Requirements	The ICCTF accepts proposals from government institutions, including line ministries, government agencies, and local governments, acting as executing agencies (EAs). These EAs may collaborate with institutions such as universities and civil cociety organisations (CSOs) for project implementation. During the preparatory phase (2010–2014), with UNDP as the interim fund manager, projects were limited to a one-year duration and had a budget cap of USD 3 million. Since transitioning to a nationally managed trust fund in 2015, these specific limitations have been revised. For instance, the ICCTF’s Annual Report for 2015 indicates that the Fund supported small scale programmes through self-management, suggesting a shift in project funding mechanisms and potentially in project duration and budget allocations. Additionally, the ICCTF credential document from 2024 details projects with varying periods and budgets, such as the Coral Reef Rehabilitation and Management Programme, which had a budget of USD 5.2 million for 2020–2023. Project selection criteria include impact, sustainability, scalability, and synergy. The capacity and experience to execute large and innovative projects promptly, along with the project’s priority status for the relevant ministries, are also considered.
Accessing the Fund	Entities which are eligible to submit proposals to the ICCTF are Government institutions such as Line Ministries, Government Agencies and Local Government as Executing Agencies (EAs). EAs may partner with other institutions including universities and CSOs to implement the project. With projects administered through UNDP, acting as the interim fund manager, eligible project duration was set to one year, while project budgets were capped at USD3 million. In addition to project selection criteria such as impact, 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 concerned, were also considered.

Fund Governance

Decision Making Structure	The ICCTF operates under a governance structure comprising: Board of Trustees (Majelis Wali Amanat – MWA): Provides strategic policy guidance, operational oversight, and evaluation. Secretariat: Manages daily operations, staffed with technical, administrative, and financial experts, supporting the MWA and coordinating with the Fund Manager. Fund Manager (Pengelola Dana Amanat – PDA): Since 2015, Bank Mandiri serves as the national fund manager, handling financial assets and reporting to the MWA. This structure ensures effective collaboration with development partners and supports the implementation of contributor-funded programmes.
Non-Government Stakeholder Participation	In 2010, the ICCTF organized two Civil Society Organisation (CSO) workshops in Jakarta to discuss the involvement of civil society stakeholders in the decision making process of the ICCTF. At the first workshop, the role, the structure and the governance mechanisms of ICCTF were discussed. The second workshop started a selection process to select two CSO representatives who would participate in the ICCTF Steering Committee and created a CSO forum to discuss the role of the CSO representatives. Approximately 18 CSOs involved in climate change issues attended the meetings.
Information Disclosure	Partial information available on the ICCTF website.
Issues Raised	Unknown.

Relationship with Official Development Assistance

Inclusion as Official Development Assistance	Yes.
Financial Instrument/ Delivery Mechanism Used (e.g. grant, loan)	Grants.
Nature of Recipient Country Involvement	The ICCTF is a national Indonesian initiative, thus ensuring that all funding decisions align with Indonesia’s national climate change priorities.