Indonesia's climate change plans boosted by $400 mln in loans

November 11, 2011

Indonesia has been granted a USD400 million loan to lower its carbon emissions and protect its people against climate change. The Japanese government of Japan is providing USD200 million with France and the Asian Development Bank (ADB) each chipping in USD100 million.

The Asian Development Bank (ADB) points out that should Indonesia implement its plans to tackle climate change, it could cost the country anywhere from 0.7 to 2.5 percent of GDP by the end of this century. Some way off perhaps, but the country's government has pledged to cut greenhouse gas emissions by 26 percent over business as usual by 2020, and will aim to increase that to over 40 percent with international help.

The fact remains that, for all the pledges, the ADB still identifies Indonesia as producing more than half of south east Asia's greenhouse gases – primarily by clearing rainforest and converting peat land to agricultural uses.

The loans are going to Indonesia's Low Carbon and Resilient Development Program, which has been implementing governmental policies including the establishment of forest management units, a legal timber verification system and developing geothermal energy.

A Japan Fund for Poverty Reduction technical assistance grant of USD700,000, administered by ADB, will complement the program and develop the capacity of national and local government agencies working on climate change adaptation policies.