World Bank grants $22m to improve Indonesian forest management

The World Bank will grant $22 million to Indonesia’s Forest Management Unit initiative (KPH) to strengthen rainforest management and reduce poverty in forest-dependent communities in the country.

The grant is the third-largest contribution ever made to the initiative, according to a World Bank statement. It includes a contribution of around $5 million from Danish development agency Danida, which is financed by the Forest Investment Program (FIP), a Climate Investment Funds financing window. The grant was also made in coordination with FIP-financed projects led by the International Finance Corporation and the Asian Development Bank, according to the World Bank.

The Norwegian government also offered $1 billion to improving forestry practices in Indonesia six years ago, but has so far only released around $60 million.

Up to ten KPH initiatives will also be chosen as part of this latest project to implement sustainable forest management and test sustainable investment opportunities, although it is not clear whether they will be financed to do so. The World Bank said the programmes will be important to sharing knowledge and improving management practices.

“Effective operationalisation of the KPH program requires strong systems for sharing, among other things, information on land use and land cover, existing licenses and permits, approaches for forest governance and management,” said World Bank senior natural resources economist Diji Chandrasekharan Behr in the statement.

About 32 million people live in and around Indonesian forest lands.

“Communities who live near forests and rely on them for livelihoods are amongst Indonesia’s poorest,” said World Bank country director for Indonesia Rodrigo Chaves.

“The Forest Investment Program offers an opportunity for them to improve their incomes through better management of the environment.”

The World Bank also criticised policy and legislation impediments to KPH’s work to date.

“Unclear and conflicting regulations, limited capacity at multiple levels, inadequate investment financing and lack of consistent information have impeded effective implementation of the KPH program,” it said in its statement, adding that KPH will also try and address policy and legislation weaknesses that affect the forest units.