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Indonesia : The GCoM Gap Fund Opportunity for Palembang


The fact that the contribution of cities to climate change and their capacity to prevent it as well as cope with its consequences vary tremendously made the global distribution of financial resources highly instrumental in tackling climate challenges. This undeniable vitality of climate finance emphasizes the urgency to warrant its optimized and well-aimed distributions. Cities are identified as the leading actors in successfully combating the adverse effects of climate change due to their contribution to 75% of global greenhouse gas emissions. Many have initiated and participated in joint cooperation while also developing climate action plans for mitigation and adaptation efforts. In fact, climate action of cities as part of the development and implementation of Nationally Determined Contributions (NDCs) is explicitly recognized in the Paris Agreement on Climate Change. However, it is proven that many cities are facing difficulties in procuring the investment needed for the development of climate infrastructure and the enactment of climate initiatives.

Global Covenant of Mayors (GCoM) for Climate and Energy, a global alliance for climate leadership, initiated City Climate Finance Gap Fund with German and Luxembourg Governments. The Gap Fund will directly address the aforementioned barrier and provide funding for cities to ensure the low-carbon and resilient urban infrastructure projects can move from concept to full feasibility analysis and investment. There are two critical steps the Gap Fund intends to engage in, which are project definition and pre-feasibility stages that hopefully would build the capacity of local authorities, build solid business cases for projects to access late-stage technical assistance, and increase the pool of bankable projects for investors.

Meeting with Palembang on 28 August 2020

Recognizing the advantage of Gap Fund, International Urban Cooperation (IUC) Asia is actively involved by assisting pilot cities in preparing for the application, in which the launch of the call for proposal is most likely to happen by next September. Today, IUC Asia Helpdesk held a virtual meeting with Palembang city officials to present how the GCoM Gap Fund would work and the expected benefits. The Helpdesk also explained the assistance that the IUC team would provide to the city during the application process, particularly the support provided to the concept note preparation.

The representative of the Environmental Agency and City Planning Agency joined the meeting and expressed the interest to participate in the upcoming call.  The participants asked clarification of the likely evaluation criteria of the project proposed, particularly whether it was possible to submit more than one project under a single application. The Helpdesk responded that it was possible to include some inter-related projects (different projects, different stages, different sites) as parts of a unique program. The addition of more projects up to the investment amount was likely feasible; however, the interconnection between those projects should be clear.

The outcome of the meeting suggested organizing a dedicated discussion for the city stakeholders, including the private sectors, to identify the most promising mitigations projects initially. The Helpdesk also pointed out to look for the projects that were already existing support from national governments.

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