The Sustainable Development Financing (SDF) project

Background

UNDP, through the Sustainable Development Financing (SDF) project as part of the UNDP’s regional programme, called Strengthening Governance of Climate Finance (GCCF), funded by the Swedish Government, has worked with the GoI from 2014-2020. The SDF Project aims to accelerate the integration of climate action within Indonesia's planning and budgeting processes in tandem with promoting gender equality, transparency, participation and poverty reduction-based principles. The project aims to:
1) Assist the government in increasing the accountability of gender-responsive fiscal policy related to climate change through budget tagging and performance-based budgeting.

2)Support the development of budgeting policies related to climate change that are gender responsive and have a positive impact on poverty reduction, transparency, and participation.

3) Support the development of fiscal policies and financing instruments to support the implementation of climate change activities in Indonesia.

Following the end of the SDF Project, the Climate Finance Network (CFN) Indonesia seeks to respond to a growing governmental demand for innovative approaches to tackle the climate crisis by promoting climate finance solutions. Building upon the work of the SDF Project and its achievements, the CFN is at the forefront of addressing climate change through innovative fiscal policy reforms and climate finance solutions that also promote gender equality and human rights through four goals: a) Knowledge Transfer; b) Technical Capacity; c) Public-Private Investment; and d) Cooperation. The CFN itself has been implemented from October 2022–December 2028.

Objectives of the CFN Project include:

  1. Increase awareness and understanding of climate finance opportunities among key stakeholders, such as government officials, private sector representatives, and civil society groups.
  2. Improve the capacity of key stakeholders to access and use climate finance to support sustainable development.
  3. Develop a strategy for leveraging and blending grants, loans, and other forms of financing to maximize the impact of climate finance investments.
  4. Facilitate funding from domestic and international sources to support climate change mitigation and adaptation activities.
  5. Develop a results-based monitoring and evaluation system to track the impact and effectiveness of climate finance investments.

In implementing these objectives, CFN Indonesia operates within four areas of work, which include: a) Climate Change Aligned Planning and Budgeting; b) Access to Potential Climate Finance; c) Gender and Social Inclusion; and e) Transparency and Accountability of Climate Change Finance.

Gender and Social Inclusion Approach

Policy Recommendation

Since 2016, through the SDF Project, the United Nations Development Programme (UNDP) has cooperated with the Ministry of Finance to develop climate budgeting efforts to achieve Indonesia’s climate change goals and commitments, as stated in its national development plans, regulations, and frameworks. However, in 2019, a need for gender mainstreaming within the national climate action policies and frameworks was also identified despite strong national commitments and regulations for gender planning and budgeting. In 2020, in line with project objectives, the SDF project collaborated with the Center for Climate Change and Multilateral Policy, the Fiscal Policy Agency, the Ministry of Finance and the Ministry of Women Empowerment and Child Protection (MoWECP) to assess underlying potential regarding the implementation of gender-responsive climate budgeting in Indonesia.

Tools

The study concluded that Indonesia’s current planning and budgeting system is sufficient to implement gender-responsive climate budgeting. However, the lack of guidance on the criteria for identification of gender-responsive climate outputs, suboptimal implementation of existing regulations and mechanisms, especially regarding gender planning and budgeting, and lack of ministerial capacity posed a challenge in its implementation. Building upon previous findings and momentum, the Ministry of Finance and MoWECP, in collaboration with the UNDP via the SDF Project, developed a technical guidance document for gender-responsive climate budgeting that offers a quick-win, short-term approach that encourages the acceleration of gender-responsive climate budget tagging through a gender checklist tool to identify gender aspects within the national climate change outputs and sub-outputs. The document was piloted in two line ministries, the Ministry of Environment and Forestry and the Ministry of Transportation.

Capacity Building

Understanding the need for gender mainstreaming within climate planning and budgeting not only at the national level but also on a regional scale, UNPD, through the SDF Project, in collaboration with the Ministry of Finance, also conducted several introductory trainings regarding the intersection of gender and climate in several regions, in the hope of encouraging and assessing the potential implementation of Gender Responsive Climate Budget Tagging within local governments. Several training sessions were conducted in Yogyakarta, East Java Province, Gunung Kidul District, and Surabaya City.

Knowledge Production and Sub-national Pilot

Following the end of the SDF Project, the Climate Finance Network aims to continue previous work and support the Indonesian government in bridging the gap between gender and climate in finance and budgeting sectors. Central to CFN’s mission is the integration of Gender Equality and Social Inclusion (GESI) into the climate public finance sphere, implemented through a specialized Gender and Social Inclusion (GESI) workstream within the project, ensuring that gender equality is mainstreamed in all aspects of its conception, development, implementation. Continued activities consist of ongoing implementation of Gender Responsive Climate Budget Tagging through tracking of Gender Responsive Climate Budgeting data from 2019 - 2024, capacity building for ministerial stakeholders, and development of knowledge products.

Additionally, to implement gender mainstreaming within three other workstreams of the CFN, activities such as analysing gender aspects within green financing instruments like the Green Sukuk and technical assistance to sub-national governments in identifying gender-responsive climate adaptation activities are also conducted. Partnering closely with the Fiscal Policy Agency (FPA) and the Ministry of Finance and coordinating with the Ministry of Women Empowerment and Child Protection, the CFN Project ensures a comprehensive approach to gender-responsive climate finance.