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Climate change has impacted development progress and increased global inequality. Therefore, all emitters, both developed and developing countries, must implement climate change mitigation and adaptation actions. Indonesia is one of the developing countries that signed the Paris Agreement. In its NDC document, Indonesia has pledged to reduce greenhouse gases emission by 29% using domestic resources (unconditional) and 41% with international support (conditional) from the business as usual (BAU) scenario by 2030. This commitment gives Indonesia the right to take advantage of various types of support, including ICF opportunities offered by the ADB through the non-UNFCCC financial scheme and the Global Green Growth Institute through the UNFCCC financial mechanism. This paper explores to what extent ICF supports the achievement of Indonesia’s Nationally Determined Contribution (NDC) target. The study uses qualitative analysis to provide a general overview of ICF in Indonesia, its climate finance strategies, and the case study of the energy sector. The study finds that ICF in Indonesia continues to develop, albeit with many limitations. Several ICF channels could be utilized more optimally such as, loan and grant instruments. Indonesia cannot rely solely on international support to meet its enormous climate finance needs; it must develop innovative financing through various instruments, such as green sukuk. ICF also plays a role in facilitating the energy transition from coal-based to renewable energy sources and increasing energy efficiency.
Suroso et al. (Tue,) studied this question.