IndoRISK Programme Officially Concludes as Government Strengthens Disaster Risk Financing
The Indonesian government has formally concluded the implementation of the Indonesia Disaster Risk Finance & Insurance (IndoRISK) programme, a strategic initiative designed to strengthen the national disaster risk financing and insurance system.
The programme closure event was held at the office of the Environment Fund Management Agency (BPDLH) in JB Tower, Central Jakarta. IndoRISK represents part of the government’s broader effort to build the state’s fiscal resilience against the economic impact of disasters.
IndoRISK was a strategic government initiative aimed at strengthening disaster risk financing mechanisms through the establishment of the Pooling Fund for Disasters (PFB). The programme was supported by international loans (LN-9197-ID) and grants from the Global Risk Financing Facility (GRiF) and became effective in October 2021.
Suska, Director of Welfare Strategy and Economic Distribution at the Directorate General of Economic and Fiscal Strategy of the Ministry of Finance, explained that the Disaster Risk Financing and Insurance Strategy (PARB), launched since 2018, represents a combination of various financial instruments to ensure disaster funding is available adequately, timely, and appropriately targeted.
“The PARB strategy launched since 2018 is a combination of various financial instruments to ensure disaster risk financing schemes are available adequately, timely, and appropriately targeted,” said Suska.
He added that going forward, the Pooling Fund for Disasters would become an important instrument in disaster risk mitigation whilst serving as a fiscal buffer for the state budget (APBN).
In its implementation, the government designated the Environment Fund Management Agency as the manager of the Pooling Fund for Disasters through Ministry of Finance Decree No. 407 of 2021. This policy was complemented by the formulation of operational guidelines for fund management, which were approved in October 2021.
Grant management optimisation was also undertaken through the transfer of signing authority from the Fiscal Policy Agency to BPDLH in February 2023. This step provided greater flexibility in financial management based on the General Service Agency framework to strengthen the public financial buffer function in facing disaster risks.
Of the total grant allocation of $10 million USD, realisation by 2026 is projected to reach $7.81 million USD, whilst approximately $2.19 million USD remained under final administrative processing.
The IndoRISK programme utilised an Investment Project Financing with Performance-Based Conditions (IPF-PBC) scheme, a fund disbursement mechanism dependent on achieving certain performance indicators. By the final implementation stage, the loan value drawn reached approximately $460 million USD, with approximately $40 million USD still under verification.
Several key indicators were successfully achieved, including the establishment of the Pooling Fund for Disasters, strengthening of the financing structure, implementation of the disaster risk financing plan, and improvement of the budget tracking system for disaster management.
The programme also involved cross-ministerial and inter-agency synergy, including the National Disaster Mitigation Agency, the Ministry of Internal Affairs of the Republic of Indonesia, the Ministry of Social Affairs of the Republic of Indonesia, and the Ministry of Health of the Republic of Indonesia.
In the final year of implementation, the realisation of budget allocation showed high achievements. Pre-disaster activities reached 96.01 per cent of the planned budget, whilst the State Property insurance programme as part of the risk transfer strategy reached 87.46 per cent.
Overall, the fund disbursement realisation rate reached 94.66 per cent, exceeding the minimum target of 80 per cent set in the performance indicators.
Meanwhile, Lead Financial Sector Economist at the World Bank, Julian Casal, expressed appreciation for the collaboration of various parties in supporting the strengthening of Indonesia’s disaster risk financing system.
“On behalf of the World Bank, I express gratitude for the support of all parties in disaster management efforts in Indonesia. This momentum is also an opportunity to reflect on Indonesia’s preparedness in disaster mitigation and risk management,” said Julian.
Through these various achievements, IndoRISK is expected to serve as an important foundation in strengthening the national disaster risk financing system whilst promoting more resilient, adaptive, and sustainable disaster management governance.