Antara News·Indonesia·Thursday, October 15, 2026 at 10:03 AM UTC

Govt outlines financing schemes for peatland restoration in Indonesia

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Aria Ananda, Yashinta Difa

Jakarta (ANTARA) - Deputy Coordinating Minister for Food Affairs Hanif Faisol Nurofiq outlined a four-pillar financing scheme for peatland restoration to rehabilitate degraded ecosystems and prevent recurring forest and land fires across Indonesia.

Speaking after a coordination meeting on forest and land fire mitigation in Jakarta on Thursday, Hanif explained that funding would combine concession holder obligations, state budgets, international green finance, and carbon market instruments.

"There are actually several approaches within the financing sector," Hanif said.

He stated that the first mechanism relies on mandatory contributions from concession holders operating within or near peatlands to manage water systems and support community empowerment.

"The first approach is mandatory. It is a requirement for all concession unit holders located in peatland areas and their surroundings to manage water systems and revitalize local communities," he added.

The second funding source stems from the government budget. The Forestry Ministry has proposed an allocation of approximately Rp550 billion (US$30.7 million) in the 2026–2027 budget ceiling to upgrade firefighting equipment, increase patrols, and construct re-wetting infrastructure such as canal blocks and retention basins.

Thirdly, Hanif highlighted international funding opportunities linked to global greenhouse gas reduction targets, emphasizing the need for strict governance and accountability for foreign grant management.

Lastly, the ministry is promoting carbon economic value instruments under Presidential Regulation No. 110 of 2025. Hanif invited domestic corporations, such as state utility firm PT PLN, to invest in domestic carbon offset projects rather than purchasing international offsets at higher costs.

"We are open to collaborating with PLN; rather than them purchasing carbon offsets at a higher price abroad, it would be better to invest domestically, where the potential is quite significant," Hanif noted.

Nearly 2.5 million hectares out of Indonesia's approximately 13 million hectares of peatland are severely degraded—requiring urgent intervention to retain soil moisture and reduce fire risks.

Systematic restoration requires canal network management, land re-wetting, and water table maintenance.

As an immediate operational example, the Coordinating Ministry for Food has prepared plans to re-wet roughly 1,650 hectares of peatland in South Kalimantan by elevating water levels from the Martapura River—part of an integrated management program targeting 10,000 hectares of high-risk fire zones.

Hanif underscored that restoring degraded peatlands requires close coordination between the Coordinating Ministry for Food, the Environment Ministry, and the Forestry Ministry, alongside active participation from the private sector and local communities.

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