Jakarta. The UK on Monday unveiled a £27.2 million (around $33 million) grant to help turbocharge Indonesia's green growth.

Both countries signed the technical agreement on the grant during British Minister for Indo-Pacific Anne-Marie Trevelyan's visit to Jakarta on Monday. The grant marks the second phase of the UK's support for the Low Carbon Development Initiative (LCDI) program that the National Development Planning Agency (Bappenas) is spearheading.

"We see LCDI as the backbone of Indonesia's green economic growth and of our bilateral cooperation on climate," Trevelyan told a news briefing shortly after the signing ceremony.

Trevelyan said that the £27.2 million grant would complement the UK's efforts to meet its international climate finance targets. The UK not long ago has vowed to spend over £11 billion in climate financing for developing nations by 2026.

The British Embassy in Indonesia revealed that the £27.2 million grant would go into training and capability building, science-based policy development, as well as piloting innovative low-carbon technologies. 

When asked to elaborate more on the grant allocations, Vivi Yulaswati, a senior official at Bappenas, told reporters later that day that the Indonesian government was still "working on the details." 

As the name suggests, the LCDI is a Bappenas initiative that aims to integrate climate action into Indonesia’s development agenda. The first phase of LCDI’s implementation --which also earned the UK’s support-- ran from 2017 to 2021. The project has now entered its second phase which will last until 2027. The LCDI will help 11 sub-national governments --including West Java and West Nusa Tenggara– to design their low-carbon development action plans. The number of participating sub-national governments, however, will likely grow in the future.

Vivi also revealed LCDI's plans to explore innovative financing schemes aside from the traditional state budget that Indonesia can use to spur its green growth.

"To date, we already have green sukuk, SDG bonds, and blue bonds. We are currently exploring coral bonds. In short, we are developing new financing schemes outside the state and regional government budgets … by involving both the domestic and global private sector to safeguard the planet together," Vivi said.

Climate action has emerged as a pivotal part of Indonesia-UK bilateral ties. 

The British government previously committed £2.7 million to provide recommendations and policy studies to help Indonesia put a price on carbon. The UK and Indonesia signed the implementing arrangement on this carbon pricing partnership in July ahead of the latter's carbon exchange launch in late September. The UK is also one of the donor countries in Indonesia’s $20 billion climate financing package Just Energy Transition Partnership (JETP).

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