The Indonesian Environment Fund (BPDLH)

A healthy and functioning environment is the right of every citizen of Indonesia. Indonesia’s national development agenda should be based on principles of sustainable development which are also environmentally friendly. The Government of Indonesia (GoI) recognizes that climate change and its many threats to human life and livelihoods present unique challenges to achieving this vision and Indonesia has prepared a series of policies to tackle these issues. At the Conference of Parties meeting in Paris in 2015, the GoI pledged through its Nationally Determined Contribution (NDC) to reduce Indonesia’s Greenhouse Gas (GHG) emissions by 41% by 2030 with international assistance (29% with its own resources) relative to a business-as-usual (BAU) scenario. To meet these targets and to ensure the sustainability of environmental protection and management, a significant increase in public and private financing that is blended and channeled to strategic environmental and climate priorities in a credible and accountable way is required.

The Environmental Fund Management Agency (Badan Pengelola Dana Lingkungan Hidup/BPDLH) was officially formed in September 2019 and launched in October 2019 to bring multiple sources of funding together to be deployed through a variety of instruments across a number of different sectors (including forestry, energy and mineral resources, carbon trading, environmental services, industry, transport, agriculture, marine and fisheries). BPDLH is an environmental funding (EF) mechanism for channeling and distributing environmental and climate funds to support Indonesia’s vision to preserve the functions of the environment and prevent environmental pollution and degradation. This includes efforts to achieve Indonesia’s commitment to reduce Indonesia’s GHG emissions and to meet the Sustainable Development Goals (SDGs).

The BPDLH is a public service agency (BLU), a non-echelon unit that is accountable to and structurally operationalized under the Minister of Finance of the Republic of Indonesia. A BLU is a government entity in Indonesia that has the legal flexibility and autonomous authority to manage its operations and is not dependent on the state budget (APBN) but can source funds from it. The BLU structure allows BPDLH to receive grants and loans, and to disburse them alongside several other economic instruments. BPDLH aims to fulfill its vision to be an environmental trust fund that is professional, credible and trusted by the world.

The purpose of the BPDLH is to channel funds through a variety of instruments to specific projects and activities that support its overall objective to improve management and protection of the environment, support environmentally friendly economic activities and reduce GHG emissions. The BPDLH aims to become a credible and trusted environmental funds management agency that manages, raises and disburses funds to support Indonesia to achieve its environmental and climate commitments.

Legal Basis

Law No. 39/2009 Environmental Protection and Management

Government Regulation No. 46/2017 Environmental Economic Instruments

Presidential Regulation No. 77/2018 Environmental Fund Management

MoF Regulation No. 137/PMK.01/2019 Organization And Work Procedures Environmental Fund Management Agency

MoF Regulation No. 182/PMK.05/2019 Minimum Service Standard of BPDLH

MoF Decree No. 779/KMK.05/2019 The Establishment Of The Environmental Fund Management Agency (Badan Pengelola Dana Lingkungan Hidup/BPDLH) At The Ministry Of Finance As A Government Agency Which Applies The Financial Management Mechanism Of A Public Service Agency

MoF Regulation No. 124/PMK.05/2020 Environmental Fund Management Procedures

Mof Regulation No. 133/PMK.05/2020 Service Rates for the Environmental Fund Management Agency at the Ministry of Finance

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