 Okay well good morning everyone this is we're running behind time so this is going to be a quite short presentation a short session sorry if you already know our our panelists here perhaps Marcel didn't introduce himself when he was a moderator Marcel works at the 3Gi in in landscapes actually then we have a mark from the World Bank and I was from landscape Indonesia. Can we please put the presentation. Now what we want to discuss in this session are two topics is what are opportunities under the Green Climate Fund and its approach to mobilizing private sector and the second item that we want to discuss is identifying concrete actions governments could take to try private sector investments. So concerning the first point what I'm gonna give is an overview of some ideas that we are discussing at GCF and I'm gonna ask the panelists to react on those ideas and ask you as well in this case the question goes to you you can tell us also when when it's your turn of the Q&A what you think how can GCF mobilize private sector then we'll have another presentation from Marcel that will look into the second theme which is identifying concrete actions governments could take in a private sector. Okay this is only three slides as you all know and you've been discussing during these days when we look at the forest and unused sector and we talk about red plus we are actually looking at the landscape as a whole. Red plus appeared as an opportunity to increase the value of standing forest but forest by themselves will not be they will not be able to protect themselves so they need additional support can we please click again more more more so previous previous so overall what we need to look is not only at the forest but also what happens outside the forest and this is what has been discussing in the morning how we engage with the private sector into deforestation free commodities but at the same time how can we provide incentives for keeping the forest and when we talk about incentives we are looking in this particular case at the value of the service of the forest by keeping the carbon stored or by absorbing the carbon from the atmosphere. Next one please so here we see two opportunities or we try to aggregate this in two opportunities for private sector so we already know how red plus work right so there is an incentive that is gonna be provided in order to keep forest and it's gonna be monetizing the tons of carbon that the forest will absorb or maintain. In the early years of red plus we know that this was happening at the project level now what we're discussing and the GCF and in compliance with the negotiations under the Convention of UNTCC is how these actions can be scaled up to the national or subnational levels so we're not talking about red plus projects we knew them in the past we're talking about the countries taking actions to transform the economies and reduce deforestation as a whole. Now what we see in the current red plus atmosphere is a lack of demand for absorbing those emission reduction or for paying for those results that will generate incentives to protect the forest. In the GCF we have recently approved a pilot program to pay for results it's a 500 million dollar pilot program that would pay five dollars per ton of results that have been achieved at the national or subnational level but there is a gap how do we finance those results and this is where we see the involvement of private sector. How can we by giving this potential payments for results can we attract private sector. We are all also conscious that GCF will not be able to pay for all the results that will be achieved and we are looking at how the developments are going on on this area there are discussions with the aviation industry that whether they could be paying or offsetting their emissions from eventually from forests. There are discussions under the implementation of Paris Agreement Article 6 if in the future there will be a market-based approach for paying for the results but at the moment we don't have them. At the moment we have some initiatives like the FCPF Carbon Fund, the Norway bilateral agreements we have the GCF as well but we can use them as a starting point to attract investments in the phase 2 of red plus the investment that will generate the results and give a potential put option for a private investor. So this is one opportunity. We need to think in this session is how we can leverage this private finance if we provide that incentive of paying in the future for those results would the private sector be interested to invest in red plus or not and what instruments can be used for that engagement. The second slide please and this is the last slide. We see the next one the next one. As we were saying before there are many companies that have committed to deforestation free supply chains and here we can see the correlation between deforestation and commitments by commodities. You see that in cattle there are few companies that have committed to deforestation free but the large amount of emissions in palm oil is more or less half and so on. So here is another opportunity for the GCF. GCF engaging with these companies and looking at what actually they need. So the question to the panelists again how do we do that? How can we take these companies these commitments and what can the GCF provide? GCF is a financial instrument that is very flexible. We provide grants, loans, equities guarantee that and we are in a position to take the risk that other institutions may not take. So question to our panelists is previous slides. How do we engage private sector here in these phases of red plus if we offer a potential put option or pay for the results and how we engage with the private companies in the second opportunity. So let's start with Marcel, please. Yeah, it's working. So thank you very much, Juan. Yeah, regarding your question, actually my presentation gives a few answers I think but I think just on the first one how to actually mobilise funding and projects for red plus. How to get that done? I think one of the things that we are looking at is not just a lack of demand for products but there is a lack of feasible projects on the ground. And I think one of the key things GCF can do is to help with the design of projects that incorporate the elements of innovative governance that is needed for landscape-wide projects and innovative finance that helps to blend different financial interests in that landscape. So and that requires quite a bit of expertise and innovation. We're dealing with very new commodities often when we talk for instance about peatland restoration. We can't deal with normal commodities but we have to look at what can grow actually in rewetted peatlands. So there's a lot of research needs for this and that incubation of projects I think is an extremely important phase where GCF could play a key role. On supporting supply chain commitments I think there have been some excellent ideas already presented here before the SCCM. I think GCF can just help to de-risk that instrument by providing some capital both in terms of loans and grant funding for such an important mechanism. Mark? You've gone right to the heart of the tricky piece. I think there's a number of different pieces to the puzzle right. I mean you've got this lack of sort of bankable projects if you like and you then have the challenge of what is actually the revenue stream from forest conservation if you're looking at it purely from that angle and then you have sort of the public sector piece of it which is in and around governance and within that governance is then how do you create the infrastructure to be able to either verify your deforestation free and or whether you are really meeting environmental and social safeguards and going back to your slide about the three stages of red plus. I see that GCF can be really important in all three of them. I think the issue for GCF is to be clear in what are the business models that you're interested in investing in and sending that signal to the market. Otherwise I think the challenges that you're going to get all sorts of different proposals that look like all sorts of different things and you'll spend an enormous amount of time trying to sort through them to find out the ones that given the structure given the board you know given a whole bunch of dynamics which fit around the COP and the GCF you won't be able to do that business. And so getting out early with clear business models around those three buckets I think is going to make it much more efficient for the GCF but it's also going to line up and help incentivize and design a pipeline that makes sense. The other thing I think that would do is I mean just thinking about the business model between you know the World Bank and the GCF is in around that leveraging and so you know when we think of the private sector we then think about the bank group if we've got a clear indication of what those structures look like then Michael can already be proactively going out there and looking for those partnerships and bringing those those deals to the table. And the last thing I think is it would be I mean you're kind of doing it here but I think there's that sort of I wouldn't call it consultation process because it's never ending but you know that market sounding of really what are these types of structures look like and then being able to go back to your board and really having a frank conversation about can we do this or can't we do this. There was discussion there about the IFC forest bond I mean that's a very particular structure that unlocked a whole bunch of things immediately and was a great product that works in one particular context and I think you'd want to have clarity on whether whether and how public funds like GCF could flow and or engage with those types of structures because you know these instruments are set up to do specific things and we just get into trouble when we try and force them to do to do other things but certainly getting behind if you're looking for where where's the biggest leverage point at the moment in this particular area it has to be around all these commitments on supply chains and how are we addressing the delta which is basically the difference in the cost between deforestation free commodity versus deforestation full commodity and there's a delta there and at the moment consumers aren't paying that delta there's a global public good that relates to what that difference in the price actually is and you know the question on table is okay how we how we splitting up that extra cost and how we're going to deal with it or are we going to legislate and make markets only sell deforestation free in which case you know the consumer will pay but that's a legislative move that needs to occur anyway. Hi, please. Thank you. Great presentation by the way one I like the phases one two three and also that you show both you know red in terms of protection but also in terms of how it relates to commodities would I think would be good is to to see a roadmap through the phases you know when at one point at what point in time you move from phase one to phase two and from phase two to phase three and also that they are actually ways to move in between phases through securitization for example you know you can just jump all the way to phase three and then let the financial institutions to securitize it all the way to phase two and phase one and even pre phase one like what Marcel suggested you know there are not enough numbers of bankable projects and what we need to do is basically to incubate pre investable projects how are we going to get funding from from from for for incubating such such ideas such pre investable projects and I'm thinking about two possible sources one is through your kind of funds you know public funds or probably philanthropies another way is basically by securitizing you know all the way from phase three or even from phase two so that investors are already going into incubation before they see projects having been prepared and investable and move to to to the next level of course then you have to have for you know certain deals with with with project owners or project developers but that is possible so a good roadmap I think with those kinds of twists and turns would be quite interesting to see risk allocation and risk balancing I think we have been talking about blended financing for for for quite a while now all morning but we just forget that we don't just throw public and private money and call it blended you know or we throw grant and investment and call it blended financing we need to see the the the the risk balancing and that's exactly the heart of of of of blended financing is to allow for reallocation of risks you know to the point that you know some you know there is a balance between the risk profile of the projects and the risk profile of the financiers you know high high risk with very very low low return you cannot go any anywhere other than going to to grant sources for example but you know low risk and high return you can probably go to a bank but in between grant and bank there are so many other other other sources of financing with their own risk profiles and we need to really make sure that those risk profiles fit with the risk profiles of the projects so you know you go to equity you go to venture you go to whatever you're going you will see that that the project will have to be matched with the risk profile of the of the financiers and then market integration I think you know GCF of course sits in an ecosystem of financing in an ecosystem of of of project development where you are and how you fit with the other ones I think would be would be interesting to see to other points I'd like to to talk about would be when is the standards you know I think the you know put safeguards would be very very good way to do it but we need to make sure again that when we talk about conservation we we know that we talk about the same thing when we talk about you know reducing the underlying causes of devastation we know exactly that we are talking about the same thing red needs to be a developmental term not only an environmental term especially in developing countries and for that I think jurisdictional or landscape approach is where we need to be going and within that jurisdictional approach we need to to know for well the role of the government the role of the local government and the role of the central government and especially the role of the governments to to to to to enable and to facilitate private sector investor to come in and for that I think it would be really really good to see some sort of a how-to document you know in each and every one of the countries not only for Indonesia but for any country you know if like like the the first question that I think one of my our colleagues asked you know if I have a million dollars what should I do if I go into Indonesia and want to invest you know the steps need to be well laid out so that you know no one will get lost in in the country thank you very much thank you so much thank you so much now we are more than running out of time now Marcel can you make your presentation and we open the floor for questions could I have the machine for the how do you call it thing to put the slides for where is it or you have it yeah so thank you all for for being here I'm just going to touch upon the the requirements to get actually projects going to we've seen a lot of theory we've seen that there's a lot of legislation put in place but actually we don't you see very little money hitting the ground that's a huge problem so I'm Master Sylvain the country representative of the Global Green Growth Institute we're a fairly new organization how does this work so we're fairly new organizations were established in 2012 with 26 member countries we're growing and Indonesia is one of the countries that has supported the establishment of this organization it's an international treaty organization we are focusing on development and the promotion of projects that simultaneously achieve poverty reduction inclusive growth environmental sustainability and economic growth and we try to do that for instance a very complex systems like peatlands this here is a just a you could see that as a peatland that circle there it's a deep peat in the middle more shallow are often very degraded peat in the in the on the on the edge and then mineral source around it we see that as one landscape you cannot address the restoration needs in these landscapes which are huge just by dealing with part of it you need to have a integrated comprehensive approach for it it's like if you're sitting in an aeroplane and the right side is allowed to smoke in the left side not that doesn't work the same as with peatlands if you allow drainage in one half it doesn't work because you can't restore the other half they're interconnected hydrologically so all the stakeholders in that landscape need to collaborate and that is a very difficult it requires innovation in governance but it also requires innovation in many other things so let's say we have here a a a peatland landscape there's a lot of business that can happen in this landscape and each of them or many of these are very innovative their high-risk commodities because they're unproven or they're orphaned commodities they need to be developed they're running 100 years behind in terms of development compared to palm oil but they have a lot of potential tenka Wang is for instance species that can produce oil rich fruits and that could replace palm oil on peat without drainage the carbon credit business is a high-risk business we don't know in which direction the policies are going the Gala wood is a species that grows up automatically after peatland degradation in many places it flowers all year so it can produce honey it has leaves that can produce kajuputi oil and it can also produce polewood but the policy frameworks in Indonesia at the moment do not even recognize this as a crop and communities that would want to plant it in the area might not be able or not be it might not be legal to harvest it under current policies so there's a lot of things that need to be done there aquaculture in peatlands peatlands are very fish rich but there's hardly any experience in how to cultivate these in cage floating cage coaches or in fish pond there is some traditional knowledge on this but how to obscure that how to improve it then on the mineral source there's a lot of proven business and we can't see the mineral source apart from the peat so we have to also look at what the economic develop opportunities are there that may alleviate the pressure for development on the peatlands itself so so I mentioned unproven business creates a lot of risk these are barriers for investors there's a need for a lot of feasibility and cost benefit analysis there's an absence of relevant finance mechanisms behind this particularly if you talk about business we should talk also about small holders about farmers farmer cooperatives people often think just about the larger companies but these are the majority stakeholders in all these landscapes and they also are the majority in terms of numbers of people that need to have green jobs and need to feed people so there is at the moment hardly any finance mechanism in Indonesia to reach to these people there's no microfinance institutions and then there are no ways at the moment to de-risk their enterprises we're asking these people to go into areas that can catch fire in every dry season where they may lose their crops that they plant there we asked them to go for innovative crops that are improving who's taking the risk can we ask these poorest of the poor people to take those risks or can we get support from government as well as from other investors to de-risk these enterprises so this is very important it's a very challenging policy environment there's a lack of a national and international carbon market this is holding back carbon investors but there's a lot of solutions to this that actually at the moment are not being discussed so the question is why there's a need for improved license processes at the moment it's very difficult to switch for instance from a forced plantation concession to a ecosystem restoration concession you have to hand back your license to the government and then you have to buy the new license again why not simplify it and allow a palm or company on peat to turn it into ecosystem restoration concession without cost and preferably give them a subsidy to help them do it there's a lack of synchronized spatial and land use plans there's no transparency of plans so there's a lack of information exchange between government departments at all levels and there's a lack of clarity on land tenure so these are all risk that risks that need to be addressed by government but also by the deaf they're being faced by the private sector a lot of operational challenges there are no trade change for many of the products that we're looking at or they're underdeveloped they need to be facilitated there's no specialized equipment to deal with rewetted peatlands there are no storage facilities for the products that come from these peatlands like the fish or the the the tanker Wang oil and there's a lot of legal challenges that need to be addressed so some of the solutions that we could look at and where we look at government particularly to take particular steps is to help development of new business models so develop public private partnership programs for such new businesses to incentivize investments in research and development and to streamline corporate social responsibility initiatives such as the SCCM is doing create new financial mechanisms so we can think about fiscal incentives for private investment we can talk about guaranteed minimum prices for innovative commodities so at least the farmers know there is a market at least a minimum offtake we can talk about mechanisms for increasing the creditworthiness of smallholders so they can get access to micro finance by for instance putting in place micro insurance facilities and other risk sharing facilities can look at enabling policies harmonizing policies in and between sectors we often see that policies are made just by for instance a ministry of force environmental forestry or just by the minister of finance these policies need to link up with each other to be workable we can talk about the establishment of a national carbon market at the moment Indonesian government is afraid actually of the international carbon trade because any carbon that is traded internationally cannot be counted towards the NDC so that's a very valid concern so how do we address this through a nested approach you can establish a kept international market you can for every carbon project provide the government with a first right to buy there's a lot of money hanging out there's 800 million from Norway a lot of finance from GCF this finance from the FCPF a lot of finance for performance-based payments but also a lot of potential for upfront financing I think once the Indonesian government defines what the rules are for carbon trading then the it becomes a very attractive it could become a very attractive market for investors to go into okay then there's a need for incentivizing community led peatland restoration and innovative developments inclusive developments at the moment again there are no policies actually that support that in a sufficient manner can streamline operations through the the harmonization of resource data and land use data we can provide also investment in creation of facilities at the community level to create higher added value products a example is for instance with Sengon which can be planted in a mineral source around peatlands if you introduce particularly equipment communities themselves can create the base products for plywood which give them a higher added value from that product and then last point there's a need for enhanced legal structures and go for the governance of the the finance mechanisms so quite a lot of things but I would like to emphasize particularly smallholders are private sector and they are the ones that can manage these landscapes if they're being incentivized and facilitated at the moment the mechanisms for that are lacking thank you thank you very much Marcel so we have like minus three minutes so we can take three questions if there's any burning question no questions hungry no hungry okay well thank you very much the panelists and there's a question wait wait there's a question thank you and sorry everyone I was just gonna I was thinking about what you said that we need new mechanisms and and especially because you also focus a lot on small companies or enterprises or initiatives and I was wondering if there's actually a very rich startup technology driven social entrepreneurship community in Indonesia I'm fairly new to the country but I've already seen that this exists and some of them are actually really advanced in what they're doing and I mean I think there could be a good potential for synergies here and maybe having them bring what they already have implemented in their knowledge and making things work on the ground quickly and bringing them to the conversation I think there could be a lot to learn that could be exchanged and used for such a larger impact topic is there any someone working on that any ideas anybody want to take community-based community-based companies okay here you go thank you very very good question actually you know some of our partners partner investors and us are actually working on smallholder farmers and you know how to basically the idea was basically is that that you know some of some of this farming practices actually are quite detrimental to or risky to to conservation you know the increasing risk of encroachment when they start you know adding more farmland so the idea is basically to provide financing to them to increase their productivity to the point that they will be able to to not expand when what they need is to to increase production and by doing so we the government could could enforce the the you know the regulation a little bit better there are two things here in the smallholder financing work one is what we call the last mile you know the delivery from you know the so for example IFC or GCF's millions of dollars into millions of rupiah you know in in in in certain villages in Indonesia for example it's not really easy if you don't want to get trapped into the micro-landing model which is very very expensive technology actually helps a lot technology helps a lot introduces the cost of money quite considerably and that is one thing that you need to pay attention to second is is is is replicability or scalability you know one one scheme may work in one village but may not necessarily work in all villages and what you don't want to do is exactly to tailor every single financial scheme in every village and that also is very very expensive one way to do it is to put an intermediary a financing intermediary in between large financiers to to to smallholders and that may actually work and that's exactly what we're doing is basically to to be the intermediary or to create intermediaries in all these areas but I certainly agree with you I think I think smallholders and small enterprises community based enterprises enterprise financing and and development is absolutely important and like you I wish there were more in this room that would run it thank you very much I was one minute answer myself yeah your question was about startups as well and you said that these mechanisms are ready for supporting startups they're working quite well of course there are a lot of very good initiatives ongoing from government private sector but what we aren't seeing yet is how to deal with the whole landscape-wide approach that is required to deal with these complex and very high-risk landscapes so the government structures for the to arrange the communities to enhance the capacity to collaborate at that scale that is lacking and you do continue that with that through startup funding but you need to have a slightly different kind of finance mechanisms to bring that about thank you so much there was one question I guess we can take one in thank you 30 seconds okay yeah I just I find a lot of times when we come to these regional meetings you know there are some challenges and then there are solutions but there are often a lot of steps in between the challenges you know to get us from the challenges to get to the point where those solutions could actually kind of be implemented and they're often very specific different circumstances and so when we're in these regional forums like this I wonder on the topic of forest finance what are the things that can be a progress at a regional level given the kind of specificity that we're talking about of these different solutions and approaches when we come to have address this topic at a regional level what are the things on which we can make progress at this at this kind of regional level in these kinds of dialogues I would just be interested to know the panel's comments on that or does this all come down to very the very specific situations in individual countries and even you know villages as we just discussed now is that clear let's ask them do you have an answer for that well look I think the thing is that you know something like finance which is incredibly specific is something you do at the project investment level the value of the regional dialogue is in sharing the experiences of what's working in the various different countries and then thinking about well would that work here I mean picking specifically up on sort of small hold of finance with doing a project at the moment in the region which is basically you know risk-based lending to small holder farmers using mobile phones and and basically using the data of their mobile phone usage so I mean that comes out of the urban space that technology basically that risk adjust lending and then all you do is you basically overlay the geospatial of where they are what they're underlying commodity as they're growing and then you can bring in the weather models and all the maps and then you end up with incredibly precise risk-based lending using a mobile platform when and you completely take away all of the costs that are so prohibitive to small holder financing which is having branches and doing the paperwork and having loan officers and that you mean just completely take that out and then you can actually take out that piece of risk that's in that underlying transaction put it a portfolio level and put it to the markets so you know those types of examples these regional things about oh wow I heard that great let's can we do that in Indonesia but I don't see that there's a big regional political thing that relates to this financing space there is actually one mechanism that is dealing with kind of regional finance I don't know at what level you see region but for instance provincial yeah no Asia Pacific region Asian Asia Pacific that's very large yeah no then then I don't have an answer but at a provincial level of course there's the payment performance based payment mechanisms that kind of incentivize regional or local government to to actually plan for sustainable development for landscape-wide restoration with that the finances Norway will have put actually the target very high and what we are looking at is in need to actually set examples on the ground project-based pilot project that are investment that are bankable it's very difficult to get the provincial wide project at a bankable stage so I think that is one of the conundrums that we're looking at at the moment okay well with that thank you very much everyone for your participation and thank you for our panelists so now Martin is gonna have the closing part of this session and I guess you all have to stay here