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(Forests and Climate Change Programme)
Financial Cooperation (FC Module)
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(Forests and Climate Change Programme)
Financial Cooperation (FC Module)
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(Forests and Climate Change Programme)
Financial Cooperation (FC Module)

The government of Germany commissioned KfW for financial and GIZ for technical support of FORCLIME. REDD demonstration activities financed by KfW are – together with other initiatives (i.e. AusAID; TNC; WWF) – among the first REDD "on the ground projects" in Indonesia (and worldwide). The REDD pilots are meant to demonstrate that local development, sustainable forest management, biodiversity conservation and climate protection go hand-in-hand.

Embedded in an overall framework for Readiness, REDD demonstration activites shall provide alternative income opportunities supporting more carbon-sensitive land-use, sustainable community development and biodiversity conservation. Demonstration activities shall address different drivers of deforestation and degradation and will be implemented in cooperation with different stakeholders. Activities include community forestry (focussing on forest dependent communities supporting their land use rights and livelihoods) and support to less destructive forest management practices in (certified) forest concession areas like Reduced Impact Logging (RIL).

KfW’s Approach

The FC component will contribute to reducing emissions from deforestation and forest degradation (REDD). Hereby, KfW aims at the implementation of strategies for forest conservation and sustainable forest management resulting in reduced GHG emissions from the forest sector and improved living conditions of the impoverished rural population. With its commitment in the FORCLIME Programme, KfW seeks to demonstrate the viability of a pro-poor REDD-mechanism in Kalimantan.

Therefore, KfW uses a district based approach in order to prepare selected pilot areas for national and international carbon markets. KfW finances measures to achieve readiness in three districts of Kalimantan (Kapuas Hulu, Malinau, Berau), realizes an investment programme for REDD demonstration activities and develops an innovative and fair incentive payment scheme. All KfW efforts are closely aligned with different project partners, such as government institutions, communities, NGOs, private sector and concession holders.

FC Module conducts several activities in order to achieve following output:

  • output 1: measures to achieve readiness financed
  • output 2: investment programme in REDD demonstration activities realised
  • output 3: innovative and fair incentive payments and compesation schemes developed and tested

Programme Phasing and Activities

The FORCLIME FC Program consist of following component:

  • Livelihood: improvement of livelihood and capacity building
  • Forest ecosystem management: forest ecosystem assesment, support to FSC certification, best practice of concession management, qualified data and information
  • Documentation and dissemination: documentation of lessons learned, documentation for FSC, CCB, VCS validation, and dissemination
  • Carbon management: carbon accounting, remote sensing, GIS, and terestrial inventory, benefit sharing financing/ carbon payment
  • Carbon management and land use planning: land use planning, carbon monitoring at site and district level, support community to conduct carbon monitoring

Investments in Demonstration Activities:

  • Financing REDD Demonstration activities "on the ground" in 3 districts of Kalimantan; addressing main drivers of deforestation/ degradation, focussing on different types of forest lands (e.g. production forests, protected forests, conservation forests);
  • Linking pilot schemes to emerging voluntary carbon markets.

Read more on "Investments in Demonstration Activities".

Additional information is available on the KfW Website