Posted on October, 26 2011

In an historic moment for Kalimantan and the Heart of Borneo Initiative, a debt-for-nature swap agreement was signed between Indonesia and the U.S. on September 29, 2011. Worth US$28.5 million, this is the first debt swap agreement that has a REDD+ focus. The funds will support forest and biodiversity conservation efforts as well as investments in green growth activities to reduce carbon emissions from deforestation, forest degradation and land use.

WWF will collaborate with the Nature Conservancy and the two governments to oversee implementation of this unique forest and climate support program. Importantly this fund will be channeled through civil society and will strengthen capacity of local institutions and stakeholders to ensure a balanced approach to economic development is supported .

“The swap will fund projects that benefit civil society as well as engage them as implementers of the program in the Heart of Borneo, something that WWF is proud to promote," said Dr. Efransjah, WWF-Indonesia CEO.

As a debt reduction mechanism to finance biodiversity and tropical forest conservation the debt-for-nature swap was authorized under the U.S. government’s Tropical Forest Conservation Act 2 (TFCA2). The three debt swap project areas – all with local governments who have agreed to work closely with civil society to conserve large areas of carbon-rich forest and biodiversity – are: the Kapuas Hulu district (in West Kalimantan Province) and Kutai Barat and Berau districts (in East Kalimantan Province).  All three contain vast biodiversity and carbon-rich tropical forest corridors connecting the Heart of Borneo’s four major national parks. The biodiversity, carbon and other ecosystem services found within these forests are under severe threat by conversion to oil palm plantations, unsustainable logging, mining, and poorly planned infrastructure development. This debt swap represents a powerful opportunity for WWF to directly contribute to Indonesian President Yudhoyono’s 26-41% GHG reduction commitment. Participation  in the swap opens the door for WWF to advance its biodiversity and climate work in Borneo and direct investments toward important work on forest and peat carbon, on agricultural commodity production affecting biodiversity, and on promoting leadership in the development of a Green Economy for Indonesia.

The Indonesian government is also positive about the agreement. “Partnership by the two countries through the TFCA2 Program will contribute to the commitment of the Indonesian Government on forest and biodiversity conservation as well as to reduce green house gas emissions outlined in the Strategic Plan of the Ministry of Forestry,” said Mr Darori, Director General of Forest Protection and Nature Conservation, Ministry of Forestry.