Jakarta. Indonesia has introduced the world’s first Disaster Pooling Fund (PFB), a groundbreaking financing mechanism designed to strengthen national disaster response and preparedness. The initiative was unveiled by the Indonesia Environmental Fund (BPDLH) under the Finance Ministry during the Asia Disaster Management and Civil Protection Conference (ADEXCO) 2025 at JIEXPO Kemayoran, Jakarta, last week.

The fund integrates resource mobilization, investment, and disbursement into a single sustainable system to ensure disaster financing is timely, effective, and sufficient.

Moving Beyond Conventional Financing
BPDLH President Director Joko Tri Haryanto said the PFB addresses the limitations of traditional disaster financing, which largely depends on the national or regional budget and is typically reactive after a disaster strikes.

“Conventional mechanisms provide limited flexibility, while Indonesia faces diverse and frequent disasters requiring significant funding,” Joko explained.

He said the PFB ensures more reliable resources through long- and short-term investments managed under strict risk controls. “This innovation exists nowhere else. Indonesia has taken bold steps by uniting fundraising, fund development, and disbursement into one ecosystem, complemented by disaster insurance and other protection mechanisms,” Joko said.

Comprehensive Protection
The fund is designed to support all phases of disaster management and includes risk transfer instruments such as state asset insurance. This coverage helps protect government property and community assets from losses in the event of natural disasters.

The initiative is backed by a legal framework, including Presidential Regulation No. 75/2021, National Disaster Mitigation Agency (BNPB) Regulation No. 1/2024, and Finance Ministry Regulations No. 28/2025 and 43/2025, making PFB a strategic instrument for national disaster financing.

This year, allocations from the PFB are being directed toward pre-disaster measures, such as strengthening health preparedness, social protection, and local government capacity to adopt technical and administrative disaster standards.

Complementing Existing Mechanisms
Joko stressed that the PFB does not replace current funding systems, such as government emergency funds, rehabilitation and reconstruction grants, or contingency reserves. Instead, it adds another financing option for both central and regional governments.

To reinforce shared ownership, the scheme encourages co-financing with local governments, adjusted to their fiscal capacity. “Through local contributions, the PFB will not be seen solely as a central government program, but as a joint initiative,” Joko said.

The fund also opens opportunities for private sector involvement through corporate social responsibility (CSR) programs. Joko said the mechanism ensures CSR contributions are more targeted toward post-disaster needs while serving as a sustainable investment in resilience against climate change and other disaster risks.

He stressed that transparency and accountability will be central to PFB operations. “Every rupiah must be measurable, accountable, and deliver tangible benefits,” Joko said.

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