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FEATURE: Financing climate compatible development: Taking a new direction

Torry Kuswardono Director of Perkumpulan Pikul-Kupang & Henriette Imelda (Program Coordinator from the Institute for Essential Services Reform) outline initiatives taken through the CDKN supported project ‘Finding the Finance: Climate Compatible Development in Asia Cities’.

The difficult task of financing climate compatible development in the city of Kupang, Indonesia took an unexpected and positive turn recently. During a CDKN-supported workshop in September on financing climate change for Kupang entitled ‘Climate Finance For Cities – Kupang’, Bank NTT, a regional bank owned by the provincial and district governments, announced that it was ready to support initiatives related to environmental protection, encouraging sustainable energy as well as sustainable and resilient economy. The workshop, organised by the Institute for Essential Services Reform, brought together 30 participants, including representatives from the government of Kupang, local banks and cooperatives, civil societies, and environmentally related small businessmen.

The director of Bank NTT, Mr. Daniel Tagudedo, said the bank welcomed proposals from communities, civil society representatives, and government institutions to apply for funding from the bank’s CSR Funds, amounting to IDR 2 billion (approx. USD 180 000) annually.

The funding announcement comes at the right time: The Kupang city government had been desperately seeking additional funding for its ‘Green and Clean City Program’. Projects are likely to concentrate on improving and expanding green areas of Kupang and also amending waste management. Civil society organisations, local inventors, and small businesses are also looking forward to enhance their existing initiatives on sustainable energy and waste management through new channels of funding. This could include bio-mass stoves, bio-gas systems and its by-products such as organic fertilisers, as well as the development of a simple solar salt-water desalination plant that can be used for villages or areas where water resources are lacking.

While a follow-up meeting with the relevant stakeholders took place a few weeks after the initial workshop helped define the next steps to enable transactions, all stakeholders must understand that the funding from NTT is not enough for the proposed wish list. Alternative ways of funding will therefore be the focus of the next workshop – to examine the national level funding streams that need to be put in place through taking into account insights that were generated at a national level workshop entitled ‘Climate Finance For Cities – National Workshop’ that took place in August as part of this project.

Picture Courtesy: CIFOR

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