Jakarta, 29 May 2025 – The Indonesian Environment Fund (BPDLH), in collaboration with the United Nations Development Programme (UNDP) Indonesia, officially launched two financing instruments to strengthen the Revolving Fund Facility (FDB) in the forestry and circular economy sectors. The event, held at Hotel Aryaduta Menteng, Jakarta, is part of a broader effort to promote a more equitable, inclusive, and impactful environmental financing transformation for communities.

The first instrument is a Sharia-based financing scheme, developed with support from UNDP through the United Nations Programme on Reducing Emissions from Deforestation and Forest Degradation (UN-REDD). This scheme is designed to be interest-free, partnership-oriented, and rooted in principles of fairness, aiming to support enterprises that uphold Sharia values and sustainable business practices. It is expected to help strengthen an inclusive green economy while simultaneously enhancing community welfare and promoting long-term environmental conservation.

The second instrument is the De-risking Facility, developed through a collaboration between UNDP and BPDLH under the ASSIST Joint Programme — an inter-agency UN initiative supported by the Joint SDG Fund. This facility unlocks access to finance for the circular economy and social forestry sectors by engaging credit guarantee institutions to reduce financing risks. Through this approach, the FDB can channel funds more flexibly to community groups previously underserved by conventional financial systems. The initiative aims to support over 10,000 MSMEs and individuals in growing their businesses, improving livelihoods, and contributing to a more sustainable environment.

“BPDLH, in collaboration with UNDP Indonesia, is developing instruments to support various stakeholders — ranging from community groups, businesses, and indigenous peoples to startups — so they can keep moving forward. The goal is not to rely solely on grants, which are limited in availability. BPDLH is offering financing options that will help entrepreneurs become more independent and continue to grow,” said Joko Tri Haryanto, President Director of BPDLH, during the opening of the event.

The launch of these two financing schemes also coincides with the closing of the Catalytic Funding for Indonesia Impact Fund Investee in Leveraging Impact Program, which ran from December 2023 to January 2025. This program is a collaboration between UNDP, BPDLH, and Mandiri Capital Indonesia (MCI) to strengthen funding for startups with social and environmental impact through a Public-Private Partnerships (PPP) approach. The program provided support to four startups in the Indonesia Impact Fund (IIF) portfolio under the management of MCI—Cakap, Delos, Fishlog, and Greenhope. Catalytic Funding is a tangible expression of Indonesia’s commitment to achieving the Sustainable Development Goals (SDGs), while accelerating the impact scale of all businesses within the IIF portfolio.

“These three initiatives are not just symbols of our commitment to the environment, but also concrete steps that involve various elements of society, the private sector, local communities, and the international community to jointly protect the environment and promote green economic growth,” said Saiful Islam, Director of Investment Management System at the Directorate General of Treasury, Ministry of Finance of the Republic of Indonesia.

The Catalytic Funding Program has made a tangible impact, reaching 2,852 beneficiaries across five provinces and 18 regencies. This initiative promotes environmentally friendly business practices, including the planting of 5,000 mangrove seedlings to strengthen coastal ecosystems and support a healthy, productive ocean. At the same time, it advances the circular economy by converting waste into shrimp-based derivative products and developing two other sustainable goods. The activities include capacity building for women’s groups, persons with disabilities, and support for 11 local MSMEs contributing to job creation and improved economic well-being.

Beyond its focus on the environment and economy, the program also supports expanding access to fair and inclusive education, especially for students in remote, outermost, and disadvantaged areas (3T). These students are equipped with environmental knowledge and English language skills to enhance their participation in sustainable development and a greener future.

"Through this innovative financing initiative, we are not just removing barriers but also opening doors, creating real opportunities for those who need it most. This initiative is not merely about funding — it's a vital foundation for dignity, empowerment, human security, and sustainable growth,” said Norimasa Shimomura, UNDP Indonesia Resident Representative.

The series of initiatives carried out, from program implementation to the launch of new financing instruments, marks a step forward in building a more inclusive and sustainable environmental financing ecosystem. This multi-stakeholder collaboration shows that investment in the environment can be a real driver of social transformation, strengthening the role of various actors in achieving sustainable development and the Sustainable Development Goals (SDGs).