PATTIRO, together with 19 civil society organizations and The Asia Foundation, successfully held a Partner Coordination Meeting (PCM) for the SETAPAK 4 Program on 24-26 February 2025 in Bali. In addition to discussing program developments, the meeting also discussed various current issues and strategies to encourage sustainable forest and land governance through green financing strategies.

The environmental funding scheme promoted by the coalition is through the Ecological Fiscal Transfer (EFT) scheme which has been implemented since 2018 until now. This scheme aims to encourage environmental management and preservation by allocating budgets from higher governments (national, provincial, district/city, and village) within the same jurisdiction based on their authority and performance.

The EFT scheme is implemented through instruments, such as the Ecological-based Provincial Budget Transfer (TAPE), the Ecological-based District Budget Transfer (TAKE), and the Ecological-based Village Budget Allocation (ALAKE), each of which has a specific purpose to support environmental projects at the local level. The presence of EFT is expected to realize sustainable development and more effective management of natural resources, while supporting climate change mitigation efforts.

In the meeting, the coalition representative, Nurul Tanjung from PATTIRO, said that to date, 44 local governments throughout Indonesia have adopted EFT, either through the TAPE, TAKE, or ALAKE schemes. In addition, the budget allocated from 2019 to February 2025 has reached 471.8 billion rupiah. This budget, when compared, is equivalent to the cost of forest and land rehabilitation for a critical land target of 43,000 hectares.

Nurul added that the number of beneficiaries of the EFT program also continues to grow, covering 24 districts/cities, 1,784 villages, and 104 sub-districts. This shows the expansion of the EFT adoption area and the increase in the number of beneficiaries throughout Indonesia.

This rapid development is supported by environmental funding policies that continue to show progress. The EFT initiative is listed in the 2025-2029 RPJMN, and EFT schemes such as TAPE, TAKE, and ALAKE have been regulated in Permendagri Number 15 of 2024 concerning Guidelines for the Preparation of the 2025 APBD. This policy further emphasizes the importance of environmental protection in efforts to mitigate climate change and sustainable development. In addition, this policy provides a strong foundation for local governments to implement and manage EFT in preparing their budgets and environmental programs.

However, challenges are faced in the momentum ahead, especially related to the transformation of regional leadership. The replacement of new regional heads requires internalization and advocacy of EFT so that its adoption continues. On the other hand, local governments that are still in office need to be encouraged to expand the application of EFT in their policies and budgets. In addition, budget efficiency policies that have the potential to reduce transfer funds to regions can cause regional heads to increasingly prioritize optional matters, ignoring environmental interests due to budget constraints.

For this reason, PATTIRO together with SETAPAK 4 partners offer a strategy to encourage the optimization of sustainable environmental funding by integrating EFT into the RPJMD policy currently being prepared by the regional government, establishing sustainable environmental funding institutions in the regions, and encouraging various other creative financing applications such as regional endowment funds. This initiative is an alternative in dealing with budget limitations allocated by the central government.