Saturday, 12 June 2010

RI to receive first $200 million grant from Norway

RI to receive first $200 million grant from Norway

Aditya Suharmoko, The Jakarta Post, Jakarta Fri, 06/11/2010

Indonesia will receive the first US$200 million in grants from Norway between 2010 and 2011, as part of the $1 billion grant to reduce emissions from deforestation, a minister said.
In the agreement, Norway has pledged to disburse the money in three phases: Capacity building, in which the government will set up an oversight agency; a pilot project, in which the government will select one forest; and nationwide, in which the government will reduce emissions from forests nationwide.

“The first phase begins now until 2011. There will be consolidation and capacity building. We will build an internationally reputable financial institution, to be completed in October 2010, in which Norway will disburse $200 million,” Coordinating Economic Minister Hatta Rajasa said at the State Palace on Thursday.

He added that in 2011 the government would select one forest, which would comply with the MRV scheme. MRV stands for measurable, reportable and verifiable, in which every ton of emission cut should be assessed by independent auditors.

The already identified forests are located in East Kalimantan, West Kalimantan, Papua, Riau and either Jambi or Bengkulu provinces.

In 2013 all forests nationwide will be protected as part of the government’s effort to reduce Indonesia’s carbon emissions by 26 percent by 2020 with its own resources, or by 41 percent with international help.

For the second and third phases Norway will disburse the money based on the amount of emissions cut, said Hatta.

President Susilo Bambang Yu-dhoyono said the government would establish a credible financial institution to manage the $1 billion grant, in response to a memo sent by Kuntoro Mangkusubroto, chairman of the Presidential Working Unit for Development Supervision and Control.

Kuntoro said developed countries had a perception that emerging countries tended to think funds were prone to corruption.

“The President said we should earn the trust of foreigners, particularly in relation to budgets,” he said.

Kuntoro has been named as a strong candidate to head the new financial institution that will manage the $1 billion grant, considering his capacity in managing the Rehabilitation and Reconstruction Agency of Nias and Aceh, hit by the 2004 tsunami.

The Indonesia-Norway agreement also requires a two-year moratorium on new concessions on peat lands and natural forests.

Hatta said the palm oil industry would not be hurt by the moratorium as the government had already allocated 8.5 million hectares of land for the industry’s operations.