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Germany further supports Indonesia with 126.5 million EUR in grant funding and preferential loans

Ambassador Dr. Schoof and Director General of Budget Financing and Risk Management of the Indonesian Ministry of Finance, Luky Alfirman - after signing the FC Agreement 2017 on 8 December 2020

Ambassador Dr. Schoof and Director General of Budget Financing and Risk Management of the Indonesian Ministry of Finance, Luky Alfirman - after signing the FC Agreement 2017 on 8 December 2020, © Ministry of Finance, Republic of Indonesia

08.12.2020 - Press release

Indonesia and Germany sign agreement on projects central to Indonesia’s development

Indonesia and Germany sign agreement on projects central to Indonesia’s development


Jakarta, 8 December 2020 – Indonesia and Germany sign an agreement regarding financial cooperation marking the start of important bilateral collaboration projects with a total volume of EUR 126.5 million, financed by the German Federal Ministry for Economic Cooperation and Development (BMZ). The 60 years of Indonesian-German cooperation continue and now expand with two new projects in the areas of energy and the protection of environment and biodiversity.

Supporting Indonesia’s endeavours of achieving the Agenda 2030 and the Sustainable Development Goals, the Indonesian-German project on “Social Forestry Support Programme” will support the Republic of Indonesia in its ambitious effort to establish 12.7 million hectares of social forestry throughout the county. The project shall be financed with a grant amounting to EUR 11.5 million from the German KfW development bank and will be implemented by the Indonesian Ministry of Environment and Forestry in selected locations in West-Kalimantan, East-Nusa Tenggara as well as West-Java. The objective of the project is to support authorities and communities in the application of social, ecological and economic sustainable forest management models in order to improve the conditions of ecosystems and local livelihoods. It will address land tenure conflicts and improve community land use rights, which will in turn lead to more social security and better economic perspectives. With positive impacts on the local income situation, biodiversity conservation, deforestation, as well as carbon sequestration, the project will provide vital support to the Nationally Determined Contribution (NDC) of the Republic of Indonesia and the protection of global goods. It is expected that the established financially sustainable and climate-resilient community forestry models will be scaled up and implemented across the country beyond the original project area in the future.

Aiming to further develop the use of renewable energy, a preferential loan regarding the project “1000 Islands – Renewable Energy for Electrification Programme (REEP), Phase III” constitutes the extension of the highly successful REEP program to promote renewable energy-based supply solutions for small island grids. The aim of the overall program is to promote climate friendly, sustainable and affordable green energy for the large number of smaller islands and remote locations within Indonesia. While phase I and II of the REEP Program are focusing on promoting solar photovoltaic based systems and small hydro plants respectively, phase III will likely focus on scaling up these technologies further. Due to the great importance of this project, phase III shall receive a preferential loan from German KfW of up to EUR 115 million.[MM1] 

German Ambassador to Indonesia, Peter Schoof states: “As one of the Global Development Partners of Germany, Indonesia is a key player to tackle global development issues. Germany supports Indonesia’s determination in achieving the Agenda 2030 and its commitment to mitigate climate change.”

The Director General of Budget Financing and Risk Management, from the Indonesian Ministry of Finance, Luky Alfirman conveys: “Indonesia has been working together with Germany for decades. We have a long-standing cooperation history and we are looking forward to continuing our successful cooperation with regard to finding sustainable solutions to Indonesia’s core development issues as well as global development issues.”

Indonesian-German development cooperation dates back to 1958. Since then, Germany has supported Indonesia in many areas contributing to the country’s development. Currently, Germany is supporting Indonesia in the focus areas of Energy, Sustainable Economic Development/Technical and Vocational Education and Training as well as Environmental Protection. Additionally, governance and private sector cooperation remain central pillars of the Indonesian-German development cooperation.

 



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