Pekanbaru, 9 July 2026 — The Riau Provincial Government held an Environmental-Based Financing Workshop in Riau Province together with Perkumpulan Mandala Katalika (MANKA), with support from the GREEN for Riau Initiative and the UNEP UN-REDD Programme Indonesia.
Held at the Parlaungan Meeting Room, Bappeda Riau Province Office, the workshop served as a learning and consultation forum to discuss institutional options and various financing sources that could support the implementation of climate action at the regional level.
The workshop was a follow-up to the launch of the Riau REDD+ programme through the GREEN for Riau Initiative on 8 May 2026, as well as part of a series of discussions on institutional readiness for climate programme management and financing. It also expanded on the discussion held the previous day during the Consultation on the Development of a Climate BLUD Guideline Document with the Riau Provincial Government.
The forum brought together representatives of the Riau Provincial Government, district governments, the Ministry of Home Affairs, regional government representatives from Aceh, the Indonesian Waqf Board, academics, civil society organizations, and development partners.
The discussion covered Riau’s institutional readiness, planning for a Regional Public Service Agency (BLUD) that carries out emission management functions, the Tropical Forest Forever Facility (TFFF), Cash Waqf Linked Sukuk, the experience of Siak Hijau, and lessons from environmental institutional development in Aceh.
Expanding Understanding of Climate Finance Sources
Opening the event, Tomi Ariyanto, Head of Perkumpulan Mandala Katalika, stated that the workshop was designed to broaden understanding of climate finance sources that can be developed at the regional level.
In addition to discussing BLUD as one institutional option, the forum also explored global financing instruments, the use of waqf for environmental programmes, and regional experiences in developing green development policies.
According to him, collaboration among regional governments, the central government, civil society organizations, financial institutions, and development partners is needed so that various site-level initiatives can be recognized and supported as part of efforts to protect forests, conserve biodiversity, and improve community welfare.
Institutions Must Respond to Regional Needs
Head of Bappeda Riau Province, Purnama Irwansyah, stated that the Riau Provincial Government is exploring the most suitable institutional form to manage environmental financing and proceeds from the development of carbon economic value.
The Riau Provincial Government had previously discussed with the Environmental Fund Management Agency (BPDLH) the possibility of managing funds through an endowment fund mechanism and an intermediary institution. Under such a scheme, the principal fund can be maintained, while the returns are used to support environmental improvement programmes on a sustainable basis.
However, according to Purnama, the choice between a BLUD, a regional-owned enterprise, or other mechanisms needs to be carefully assessed. The selected institution must have clear business processes, service types, oversight systems, and fund management mechanisms.
BLUD is one option under consideration because it remains within the control of the regional government while offering flexibility in financial management. Nevertheless, any decision to establish an institution must be based on a comprehensive analysis and not solely on the opportunity to access carbon financing.
Representing the Director for Synchronization of Regional Government Affairs I, Directorate General of Regional Development, Ministry of Home Affairs, Rima Yuliantari emphasized that climate change is a cross-sectoral issue. Therefore, mitigation and adaptation require governance that connects regional agencies, planning documents, programmes, activities, and emission reduction targets.
She explained that the Riau Provincial Government provides important lessons in the development of governance guidelines for UPTD BLUD to support the implementation of carbon economic value. One aspect that needs to be identified is the type of services that can be provided by a UPTD BLUD so that the institution has a clear function and can operate sustainably.
GREEN for Riau Promotes High-Integrity Climate Finance
Bambang Arifatmi, Country Coordinator of the UNEP UN-REDD Programme Indonesia, explained that GREEN for Riau is directed at strengthening Riau Province’s readiness to access high-integrity climate finance through a jurisdictional REDD+ approach.
The programme supports Riau’s contribution to achieving Indonesia’s Nationally Determined Contribution (NDC) and FOLU Net Sink 2030 targets. Riau is considered strategically important because it has peatlands, forests, mangroves, and biodiversity that are essential for emission reduction efforts and green economic development.
However, the financing needs for mitigation action in Riau cannot be met solely through the regional budget, grants, or philanthropic funding. Therefore, GREEN for Riau is also preparing mechanisms capable of mobilizing, managing, and channeling financing from various sources.
Institutional readiness for financing is one of the key outputs of GREEN for Riau, alongside strengthening the REDD+ strategy, data systems and emission measurement, safeguards, benefit-sharing mechanisms, and technical capacity building.
Bambang emphasized that the success of climate finance development does not depend only on the establishment of an institution. It also requires political commitment, regional leadership, ownership by government and stakeholders, good governance, cross-sectoral collaboration, and the application of inclusivity principles.
Before determining the institutional form, a comprehensive gap analysis is needed, covering regulations, institutional structure, human resource capacity, supporting infrastructure, financial governance, and benefit distribution mechanisms.
BLUD Is an Option, Not an Obligation
Director of Perkumpulan Mandala Katalika, Juliarta Bramansa Ottay, shared lessons from the management of jurisdictional emission reduction programmes in Jambi and East Kalimantan.
According to him, the use of temporary working groups or committees faces challenges related to sustainability, alignment with regional planning cycles, budgeting, coordination, and decision-making.
Based on these lessons, MANKA, together with elements of the Directorate General of Regional Development, the Directorate General of Regional Autonomy, and the Directorate General of Regional Finance of the Ministry of Home Affairs, is developing institutional guidelines for climate programme management and financing at the provincial level.
The guideline is designed to provide options for regional governments, not to require all provinces to establish a BLUD. Regions can adapt their institutional arrangements based on their conditions, capacity, existing UPTDs, potential revenue sources, and the types of services to be delivered.
Juliarta emphasized that a BLUD is not intended to take over all the duties of regional agencies in environmental management. Instead, the institution is directed to carry out specific functions, particularly those related to programme management, climate finance, carbon economic value, and environmental services that can be developed professionally and sustainably.
From the perspective of regional financial management, Nurminda Y.H., representing the BLUD Subdirectorate of the Directorate General of Regional Finance, Ministry of Home Affairs, stated that a BLUD can provide flexibility and space for the development of creative financing.
Revenue from services and carbon economic value instruments can be used to support operations and improve the quality of public services. However, BLUD implementation must meet substantive, technical, and administrative requirements. BLUD planning must also be integrated with the strategic plan of the relevant regional agency and the RPJMD, while remaining part of the regional government’s financial and accountability system.
Institutional Lessons from Aceh
Head of the Aceh Environment and Forestry Agency, A. Hanan, shared Aceh’s experience in establishing and structuring UPTDs in the environmental and forestry sectors.
Aceh currently has a regional waste management UPTD and an environmental laboratory UPTD, in addition to forest management units at the site level. According to him, establishing a UPTD and applying the BLUD financial management model require a long process, supporting documents, and extensive coordination.
For this reason, the central government is expected to simplify procedures and provide assistance so that regions can build environmental finance management institutions more quickly.
He proposed that environmental finance management institutions be placed within sectors that have direct duties and functions in environmental management. Such institutions must also be designed so that the funds managed can deliver tangible benefits to communities and support environmental activities at the site level.
Expanding Environmental Financing Sources
During the innovative financing session, Tomi Ariyanto presented the Tropical Forest Forever Facility (TFFF), a global initiative designed to provide performance-based incentives to tropical forest countries for maintaining their forest cover.
Unlike REDD+, which calculates emission reductions in carbon units, TFFF provides rewards based on the area of tropical forests that remains protected. The scheme is designed as an additional financing source, not as a replacement for REDD+ programmes or existing environmental finance sources.
TFFF also pays attention to Indigenous Peoples and local communities by allocating part of its financing benefits to groups that play a direct role in protecting forests. Although the mechanism is still being developed at the global level, TFFF demonstrates the growing diversity of financing instruments for forest protection.
Meanwhile, M. Ali Yusuf from the Indonesian Waqf Board explained opportunities to use waqf to support environmental programmes. Waqf is not limited to land or buildings; it can also take the form of cash waqf managed to generate sustainable benefits.
Through the Cash Waqf Linked Sukuk mechanism, the principal waqf fund is placed in government sukuk instruments, while the returns are used to finance social and environmental programmes. The principle of preserving the principal fund and using its returns is considered relevant to the idea of an environmental endowment fund.
The Indonesian Waqf Board also has a Green Waqf Framework, which opens opportunities for collaboration between waqf managers and organizations implementing conservation, renewable energy, waste management, sustainable agriculture, and forest protection activities.
Siak Hijau Encourages the Establishment of Financing Institutions
Representing the Regent of Siak, Taufik, S.P., Chair of the Siak Hijau Secretariat Team, explained that ecology-based development has become part of Siak Regency’s development vision.
This commitment has been strengthened through Siak Regency Regulation No. 4 of 2022 on Siak Green Regency and has been integrated into regional development planning documents. One of its policy directions is the development of green financing institutions.
Siak has developed an institutional concept expected to collect and manage funds from the regional budget, national budget, partnerships, corporate social responsibility, philanthropy, and other financing sources.
Several potential services that could be developed include waste management, ecotourism, conservation, and social forestry enterprise development. However, its implementation still faces limitations in district authority, uncertainty over the main service model, and the need for synchronization with provincial government policies.
For this reason, collaboration between Siak Hijau and GREEN for Riau is considered important, particularly in connecting district-level programmes with carbon economic value management and jurisdictional climate finance at the provincial level.
Toward Transparent and Sustainable Climate Finance
The workshop emphasized that there is no single financing model that can address all climate action needs. BLUD, endowment funds, TFFF, waqf, blended finance, public funds, philanthropy, and private investment need to be positioned as complementary instruments.
Inputs from the workshop will help strengthen the Riau Provincial Government’s readiness to determine the most suitable institutional model. This process needs to be followed by further analysis of regulations, institutional capacity, human resources, service models, revenue potential, accountability systems, and the relationship between provincial and district governments.
Through stronger governance and diversified financing sources, Riau is expected to build a climate finance mechanism that is transparent, accountable, inclusive, and sustainable, while ensuring that its benefits are felt by communities and support the protection of forests, peatlands, and other important ecosystems.
