Overview

The Indonesian economy is composed of many sectors, each with its own challenges and opportunities. This page explores the sectors identified as high priority in Indonesia, with significant mitigation and adaptation potentials, with support by the GCF. In a capacity needs assessment conducted in Indonesia, it was uncovered that the distribution of GCF funding has been unequally distributed between different sectors in the country. Therefore, by understanding the significance of distinct sectors, the GCF funding can be efficiently allocated to fulfil both the country’s needs, as well as national climate goals. To initiate writing a funding proposal to the GCF, with a theme matching any of Indonesia’s priority sectors (Energy, Water, FOLU, Food), this page can be navigated through to find sector-specific information, specific to Indonesia’s needs, and to GCF applications.

The forest and other land uses (FOLU) sector is the largest greenhouse gas (GHG) -emitting sector in Indonesia. In Indonesia’s nationally-determined contribution, FOLU sector also shows the highest commitment to reduction of emissions. In the mid-term, FOLU sector is geared towards sectoral carbon neutrality (net zero emissions) by 2030 and will continue to contribute to achieving carbon neutrality by 2060 or earlier. According to Indonesia’s country programme document, the FOLU sector’s mitigation measures consist of various sustainable restoration activities such as (1) restoration and management of peatlands, (2) rehabilitation of forests and land, (3) reduction of deforestation rate, and (4) improvement of agricultural productivity and efficiency.

Sector-Specific GCF Eligibility

The first step to begin preparing for a project’s funding proposal, is determining whether the project proponents have sufficient knowledge, resources, and tools at disposal. An eligibility survey tool has been developed in the form of a self-assessment questionnaire that can be taken on the following page: Link. The survey includes information on the priority sectors in Indonesia, which include the FOLU sector.

Sector Expertise

For a successful funding proposal, it is necessary that appropriate professional experience in the FOLU sector of the underlying technologies in the FOLU sector is included. To strengthen the proposal and increase chances of succeeding in obtaining funding from the GCF, as well as to be able to answer technical questions as they arise, assistance and support from experts in the field of project are needed. A potential pool of experts that may support your proposal is provided in form of a Knowledge Expert Pool at GCF Knowledge Platform on the Indonesian NDA website. By searching for certain expertise (e.g. FOLU), experts with the respective expertise can be identified. Identifies experts can be directly contacted via the platform: Link

Sector specific considerations for applying to GCF

Alignment to sector specific aspects, policies and regulations

A project in the FOLU sector must be aligned to the latest FOLU-related policies and regulations from Indonesia, and ideally, the concept/proposal would build onto the country’s strategies and ambitions in the FOLU sector. Alignment can be ensured by reviewing Indonesia’s latest NDC submission, and by reviewing the country’s most up-to-date CPD as published by the GCF. Additional documents that shape the country’s strategies, particularly in regard to the FOLU sector, include but are not limited to:

The are a number of governmental institutions relevant to managing the FOLU sector, as follows:

Indonesia’s NDC lists target areas of focus to reduce emissions from the FOLU sector. Indonesia has set up an ambition target of peatland restoration of 2 million hectares (ha) and rehabilitation of 12 million ha of degraded lands by 2030. Through Article 5 of the UNFCCC, Indonesia recognizes the roles of forests and reduction of emissions from deforestation and degradation of forests (REDD+). Indonesia has progressed in implementing REDD+ as it has moved from readiness and transition into full implementation phase of REDD+ in achieving NDC targets and net sink in the FOLU sector by 2030. The FOLU net sink 2030 is to be achieved through REDD+, increasing carbon sequestration capacity of natural forests and land systems, reducing emissions from fires and peat decomposition, and law enforcement.

Concept and Proposal development

Indonesian GCF priorities are listed in the CPD of Indonesia (find on: Link), and they fall in-line with Indonesia’s strategy. For more information on the GCF’s focus areas and investment framework, the practical guide can be reviewed on: Link. In the practical guide, the detailed steps needed to prepare and submit a concept note and funding proposal are included. Additionally, Indonesia-specific GCF investment criteria can be found in the CPD (see pages 48-50).

FOLU Sector: Specific guidance by the GCF

The GCF has published sector-specific documents that draw out pathways leading to transformative change within these sectors, with some of these sectors falling under the scope of FOLU. By familiarising oneself with the priorities and the focus areas of the GCF, the project’s alignment with the GCF’s climate goals is ensured, and the project work is aligned with the paradigm shift pathways for transformational contributions to both national and international climate ambitions. Additionally, barriers expected to hinder the progress in each of the listed sectors are presented in the guides, which can help to better understand and anticipate the challenges possibly awaiting as project development progresses.

The documents as published by GCF can be reviewed for the detailed actions to bring the country onto each of the paradigm shift pathways (link). The following table lists out some of the potential barriers for each of the listed FOLU sectors, as relevant to the Indonesian context.

FOLU Sector: Specific guidance by the GCF

Paradigm shifting pathways Barriers
GHG reduction from FOLU Optimize REDD+ (Reducing Emissions from Deforestation and Forest Degradation)
  • Increasing carbon sequestration capacity of natural forests and land systems
  • Reducing emissions from fires and peat decomposition
Enhance the law enforcement
  • Build institutional capacity and governance for the law enforcement
 Technical barriers:
  • Limited data on carbon stocks, inadequate MRV systems
  • Insufficient capacity for fire monitoring, peatland restoration, and forest regeneration
Financing barriers:
  • Risk-averse investors hesitate to support land-based mitigation without clear returns or stable policy environments
  • Lack of support from the private sectir on deforestation-free supply chain commitments
Governance barriers:
  • Unclear or overlapping land ownership creates conflict and discourages long-term investments in sustainable land management
  • Lack of recognition of customary and indigenous land rights undermines local support and participation in conservation efforts
Restoration and management of peatlands Mapping for petland zones
  • Map peatland depth, carbon stock, hydrological conditions, petland condition and degradation
Develop the strategy for petland restoration and management
  • Rewetting of degraded peatlands throught the innovation or technology for raising water tables and restoring natural hydrology
Fire prevention and control for petlands
  • Implement the early awarning system and community-based fire patrol
  • Establish buffer zones and maintain high water levels to prevent fire
Enhance the management for petlands protection
  • Designate protected peatland areas under national conservation laws or protected area systems
  • Developing the governance for monitoring process and law enforcement for petlands restoration
 Technical barriers:
  • Limited technical and data capacity, including inadequate access to high-resolution mapping tools, real-time fire detection systems, and expertise in peatland hydrology and restoration
Financing barriers:
  • Insufficient and unsustainable financing, which constrains large-scale restoration, infrastructure development, and long-term monitoring and protection efforts
Governance barriers:
  • Lack of enforcement, unclear land tenure, limited coordination among agencies, and lack of community involvement.
Social barriers:
  • Limited community engagement and support, driven by low awareness of peatland value, reliance on unsustainable land-use practices for livelihoods, and exclusion from decision-making and benefit-sharing processes.
Rehabilitation of forests and land Forest restoration to foster the enhancement of forest carbon stocks and increase ecosystem resilience
  • Mapping the zones dan restoring degraded forests
  • Decouple the production of goods and services from unsustainable forest landscape consumption
  • Decouple the achievement and satisfaction of human needs from the imperative to consume more products which impact on forests and other types of land use
Conservation and sustainable management of forest landscapes
  • Ensure ecosystem services provision while increasing resilience by establishing protected areas is critical for conserving biodiversity and ensuring the long-term use of forests
Strengthening governance
  • Enhancing forest and land governance for climate investments will integrate communities into FOLU landscape planning and decision making through improved enabling environment
 Technology barriers:
  • Limited availability of advanced spatial and monitoring technologies for accurate mapping, tracking forest degradation, and assessing restoration progress at scale
  • Insufficient development and deployment of sustainable production technologies that can reduce the reliance on unsustainable forest resource consumption while meeting human needs
Governance barriers:
  • Unclear or overlapping land ownership creates conflict and discourages long-term investments in sustainable land management
  • Lack of recognition of customary and indigenous land rights undermines local support and participation in conservation efforts
Social barriers:
  • Insufficient inclusion and empowerment of local communities in forest governance and decision-making, which limits their participation, ownership, and support for sustainable forest restoration and management efforts
Improvement of agricultural productivity and efficiency Climate finance serves as an entry point for strengthening governance
  • Enhancing forest and land governance for climate investments will integrate communities into FOLU landscape planning and decision making through improved enabling environment
Empowering communities through improved engagement
  • Securing land tenure for communities in forest adjacent areas will improve access to financing mechanisms for local communities that can empower them to engage in sustainable land and livelihood management
Inclusive and sustainable agricultural practices
  • Securing land tenure for local communities and indigenous peoples, and promoting landscape-level approaches such as agroforestry and sustainable forest management
  • Encourage the participation of private sectors for supporting the FOLU management and protection
Deforestation-free commodity supply chains
  • Contributing to forest conservation and to reducing emissions driven by land use change.
 Governance barriers:
  • Lack of institutional coordination and enforcement, which limits effective integration of communities into landscape planning and the implementation of sustainable land management practices
  • Unclear or insecure land tenure policies hinder community access to financing mechanisms and undermine their ability to participate meaningfully in forest governance and sustainable agricultural initiatives
Social & economic barriers:
  • Limited community empowerment and participation due to lack of awareness, education, and inclusion in decision-making processes
  • Insufficient access to affordable financing and markets for local communities and smallholders
Technology barriers:
  • Insufficient development and deployment of integrated data management and monitoring systems

In the case a project is eligible to use the simple application process (see: practical guide page #), the sectoral information within the SAP technical guidelines can be used (links). These guides discuss paradigm shifts, but they also list out indicators for impact measurement, and examples

FOLU Sector: Specific technical considerations

When developing project concepts for the FOLU sector, some technical aspects should be considered to ensure accurate estimation of the project’s mitigation and adaptation potentials, and to successfully obtain funding. Some of the key aspects to take into consideration are elaborated in the following points:

  • Data Availability: Data availability in the Forestry and Land Use (FOLU) sector is essential for developing robust Green Climate Fund (GCF) proposals. Proposals must be grounded in a clear climate rationale supported by scientific evidence, including species resilience (e.g., mangroves against storm surges), quantified greenhouse gas emission reductions in tCO₂eq, and cost-effectiveness analysis (cost per tCO₂eq). Accurate data underpin the Integrated Results Management Framework (IRMF), which tracks adaptation outcomes, including asset resilience and climate-resilient resource management. Proposals must align with national policies, such as Nationally Determined Contributions (NDCs), and address barriers to climate finance while incorporating climate risk assessments, selecting resilient species, and utilising innovative funding structures (e.g., blended finance). Collaboration with accredited entities and climate experts ensures data quality, financial viability, and alignment with GCF requirements for impact and scalability.
  • Project Boundaries: Defining project boundaries is critical to ensure that only the processes or equipment linked to the specific project are included in the calculations
  • Technology Performance: Different technologies, especially new ones, can present high levels of uncertainty in terms of performance and risk of failure. Careful assessments should be conducted to clarify potential impacts and risks. In the case of the FOLU sector, the technology includes the use of climate-resilient, low-emission, and cost-effective solutions such as remote sensing, climate-smart agriculture, and nature-based approaches like resilient species reforestation. Proposals should incorporate robust MRV systems and technologies that enable measurable emission reductions and adaptation impacts. Preference is given to scalable technologies that support paradigm shifts and attract private sector investment.
  • Rebound Effects and Leakage: Improvements on the FOLU management may lead to improved efficiency often lead to increased demand, known as rebound effects, which must be considered in the calculations. At the same time, some activities like replacement of equipment can cause emissions to shift elsewhere, or to leak. Therefore, when estimating mitigation potentials, such indirect impacts must be accounted for.
  • Calculations: In any instance where calculations are performed to provide project-related estimations, clear and detailed explanations of all calculation methods, assumptions, and data used is crucial. Additionally, conservative numbers should be used to avoid overestimations.

GCF Project Examples

As success stories, the documents of some of the projects that have successfully received GCF funding in Indonesia, and are currently undergoing implementation in the FOLU sector can be reviewed. These examples include the following:

Land-based Mitigation and Adaptation through a Jurisdictional Approach in West Kalimantan.

This project aims to empower local communities through sustainable forest management and climate-resilientagricultural practices in Kapuas Hulu, Ketapang, Kubu Raya, Sanggau, and Sintang. It also aims to implement institutional, technical, and financial interventions that enhance land use governance, increase community participation, and create sustainable economic opportunities. This includes dedicated financing mechanisms for indigenous peoples and local communities. Upon successful implementation, this $113.7 million project is expected to avoid 16 million tons of emissions.This project aims to empower local communities through sustainable forest management and climate-resilientagricultural practices in Kapuas Hulu, Ketapang, Kubu Raya, Sanggau, and Sintang. It also aims to implement institutional, technical, and financial interventions that enhance land use governance, increase community participation, and create sustainable economic opportunities. This includes dedicated financing mechanisms for indigenous peoples and local communities. Upon successful implementation, this $113.7 million project is expected to avoid 16 million tons of emissions.

Read More
Indonesia REDD-plus Results-Based Payment (RBP) for results period 2014-2016.

This project is to recognize Indonesia’s REDD+ results in the period of 2014-2016 that successfully reduced 27 million tons of carbon dioxide equivalent submitted to the GCF for results-based payments. Indonesia will use the proceeds to invest in activites that support the implementation of the REDD+ action strategy (STRANAS) that augment current forest governance that includes working with key agencies at the national, provincial, and local levels to strengthen the development, coordination, and implementation of Indonesia’s overall REDD+ architecture as well as providing support to decentralized sustainable forest governance, including establishing forest management units and expanding implementation of the country’s social forestry program. This project provides $103.8 million and will avoid 20.3 million tons of emissions of carbon dioxide equivalent.

Read More

Video Resources