Indonesia - US Completed Debt-For-Nature Swap Transferring Process for Coral Reef Conservation

Jakarta, January 17, 2025 – The Government of Indonesia and the Government of the United States completed the process of transferring a debt-for-nature swap worth 35 million US dollars on January 15, 2025. With the support of a number of conservation organizations, the debt of the Indonesian Government to the US Government has officially been transferred for conservation and protection activities for coral reef ecosystems in the territory of Indonesia.

Director of Ecosystem and Aquatic Biota Conservation, Ministry of Maritime Affairs and Fisheries of the Republic of Indonesia, M. Firdaus Agung Kunto Kurniawan, said that the debt transfer process had been going on for several years, which was then agreed upon in July 2024. According to him, the use of funds from this debt transfer will be focused on supporting the protection and conservation of coral reef ecosystems in the Bird's Head Seascape and the Sunda-Banda Sea.

"These two stretches were chosen because they are included in the world's coral triangle. This is an area of ​​high biodiversity value. Several studies have stated that almost 75 percent of the world's coral reef species are in the coral triangle area," he said.

Indonesia itself has the largest coral reef area in the world. Its area is estimated to reach more than 51 thousand square kilometers, or equivalent to 18% of the total area of ​​coral reefs in the world. Coral reefs are not only a commodity that boosts the tourism sector, but also provide protection against natural disasters and absorb carbon from the atmosphere. Coral reefs are also a mainstay for coastal communities that depend on marine products for their livelihoods.

The Role of Conservation Organizations

The agreement to transfer the Indonesian Government's debt by the US Government occurred through the role of two international non-profit conservation organizations: The Nature Conservancy (TNC) and Conservancy International (CI). These two organizations have partners in the Indonesian region, namely Yayasan Konservasi Alam Nusantara (YKAN) and Yayasan Konservasi Cakrawala Indonesia.

All parties agreed to contribute so that the total funds to be managed reached 35 million US dollars. The Nature Conservancy CEO Jennifer Morris said that the debt-for-nature swap provided under the Coral Reef Conservation Agreement (CRCA) under the US Tropical Forest and Coral Reef Conservation Act (TFCCA) prioritizes its allocation for four things.

"First, for coral reefs and coastal marine ecosystems that surround, or are directly related to coral reefs and are important for maintaining the ecological integrity of coral reefs such as seagrass, mangroves, and also ecosystems that form on the sandy seabed where various organisms live and interact. Second, marine protected areas. Third, habitat connectivity zones and potential conservation locations in the future and finally endangered, threatened, and protected marine species," said Jennifer. 

Meanwhile, YKAN Executive Director Herlina Hartanto added that one of the main activities of utilizing this grant fund is through community involvement. According to her, the community will be given increased capacity to face the challenges of environmental damage.

"During the nine-year period of the TFCCA program, the community will be the main actor, not only as a beneficiary but also as an implementer in the field. This is important for the sustainability of efforts to protect the coral reef ecosystem. Of course, we do not want the end of the TFCCA program also to end the good practices that have been built together," she added.

The funds from the debt transfer will later be managed by the Supervisory Committee in a trust fund account. The Supervisory Committee itself is led by the Ministry of Maritime Affairs and Fisheries and consists of the Ministry of Finance and a number of non-profit organizations.