Transparency and Public Participation in Green Financing and Just Energy Transition Policies (ID0167)

Project Overview

The Indonesian government faces a funding gap in achieving its NDC and energy transition targets, as climate financing needs far exceed the capacity of the state and regional budgets. Therefore, a commitment to green financing and energy transition that promotes transparency, accountability, and fairness based on the principles of Open Government is required to encourage collaboration, public participation, and strengthened accountability.

Targeted Issues

Indonesian Government has set ambigious Nationally Determined Contribution (NDC) 2020–2030 target to overcome the climate change. However, the implematation faces significant financial gap. The requirement for high cost climate financing has produced several financial strategies to not fully rellying on Indonesian State Budget, such as mobilizing the support of non-governement and ulitizing alternative financing strategies that come from foreign funding. The implementation of green financing has not yet fully reflected the principles of Open Government. Insufficient transparency and weak accountability pose risks of inefficiency and limited public participation. These governance gaps may undermine the effectiveness of environmental protection programs, thereby increasing the risks of environmental degradation, disasters, and loss of livelihoods. Affected stakeholders include the general public—particularly communities in disaster-prone and climate vulnerable areas, and vulnerable groups such as Indigenous Peoples, smallholder farmers, and fishers, as well as local governments with limited fiscal capacity and constrained access to funding for environmental programs. The current design of the energy transition has not yet been fully inclusive or equitable, as evidenced by: Limited access to data and information related to the planning and implementation of the just energy transition; The absence of community-based monitoring and grievance mechanisms for energy projects; Ineffective implementation of the Regional Energy General Plan (RUED); and Limited public participation, particularly unequal access to and control over decision-making for women in the context of the just energy transition.

Causes of the Problem

Limited transparency and accountability in green finance governance, resulting in information on financing schemes, budget allocations, and project implementation that is not easily accessible to or monitored by the public. Limited fiscal, technical, and institutional capacity of local governments and nongovernment stakeholders to access, prepare, and manage green finance projects. The limited influence of the Regional Energy General Plan (RUED) on the implementation of energy transition initiatives at the local level, due to insufficient commitment and capacity of local governments to translate the plan into operational and just energy transition measures. Limited space and structured mechanisms for public participation in the planning, implementation, and monitoring of green finance and energy transition initiatives, further exacerbated by the absence of formal guidelines or official channels for public participation as a platform for collaboration and project monitoring. In addition, inequities in access, participation, decision-making control, and benefit-sharing for women persist, reflecting energy transition policies that remain largely gender-blind.

Proposed Solutions

The proposed solution is to promote crosssectoral collaboration to strengthen transparent, accountable, and inclusive green finance governance through the following measures: 1.Strengthening transparency and public access to information on green financing, including financing instruments and schemes, budget allocation data, and project implementation data, through publicly accessible platforms or websites; 2.Formulating policy recommendations to enhance access to and opportunities for green financing at the local level, while promoting the participation of communities—including vulnerable groups and civil society organizations in accessing and utilizing green financerelated information; 3.Enhancing the capacity of communities and local governments to understand, access, and manage existing and potential green financing mechanisms applicable at the local level; and 4.Developing guidelines for public participation in policy planning and decision-making processes related to a just energy transition, grounded in principles of equity and inclusiveness.

Relevance to 5 OGI Strategic Issues

1.Energy, Environment, and Natural Resources. Green financing should be guided by principles of environmental sustainability and the responsible use of natural resources, while supporting an equitable and just energy transition. 2.Anti-Corruption and Budget Transparency. Green financing and the energy transition should uphold principles of transparency, accountability, and corruption prevention in public financial management. Budget allocations and project implementation information must be publicly accessible and subject to public oversight to ensure accountability

Relevance to the Government's Priority Agenda

This commitment is aligned with the Asta Cita framework, National Priority 2 of the 2025–2029 National MediumTerm Development Plan (RPJMN), and the 17 Presidential Priority Programs. Cross-sectoral collaboration under this commitment supports these priorities by strengthening transparent, accountable, and equitable governance of green finance and the energy transition. In addition, the proposed actions contribute to the achievement of Indonesia’s 2030 Nationally Determined Contribution (NDC), the 2030 FOLU Net Sink target, and the Net Zero Emissions target by 2050. This initiative also supports the attainment of Sustainable Development Goal (SDG) 13 on Climate Action and SDG 17 on Partnerships for the Goals.

Expected Outcome

1.Enhanced transparency and public access to information on green financing, including financing instruments and schemes, budget allocation data, and project implementation information, made available through publicly accessible platforms or websites. 2.Policy recommendations (policy briefs) developed to strengthen green financing at the subnational level and to enhance public participation in green finance governance. 3.Capacity-building activities implemented for communities and local governments to strengthen their understanding of, and ability to manage and implement, green financing mechanisms, including Ecological Fiscal Transfers (EFT) and other relevant green financing instruments. 4.Guidelines on public participation developed and made available to support inclusive and equitable participation in policy planning and decision-making processes related to the energy transition.

Commitment Plan

Results Indicators | Output | Timeline

Enhanced transparency and public access to green financing information through publicly accessible platforms or websites. | EFT and AKSARA data are publicly accessible and subject to joint monitoring. | Estimated final output in M24

Developed policy recommendations (policy briefs) to strengthen green financing at the subnational level and to enhance public participation in green finance governance. | Policy brief is diseminated through relevant Ministries/Agency | Estimated final output in M18

Implemented capacitybuilding for communities and local governments to strengthen their understanding of, and ability to manage and implement, green financing mechanisms, including Ecological Fiscal Transfers (EFT) and other relevant green financing instruments. | Training modules developed and a minimum of 20 participants from civil society organizations (CSOs) and local governments engaged in capacitybuilding activities, representing diverse institutions and regions. | Estimated final output in M24

Developed guideline on public participation to support inclusive and equitable participation in policy planning and decision-making processes related to the energy transition. | Guideline on public participation to support inclusive and equitable participation in policy planning and decisionmaking processes related to the energy transition. | Estimated final output in M18