Indonesia’s Forest Financing Gap Tops $5 Billion — WWF Wants Reform

Destructive capital flows outpace conservation investment by more than 13 to one, a joint WWF and Conservation Strategy Fund study has found.

Wood Central
Wood Central
Thu 09 Apr 26
The Darul Mukhlisin Islamic Boarding School in Menang Gini Village, Aceh Tamiang, witnessed the ferocity of Tropical Cyclone Senyar, which struck the Asia Pacific region, including Indonesia. It hit on December 14, 2025, causing massive damage. According to data from the Indonesian National Disaster Management Agency (BNPB), 1, 016 people have died in three provinces (Aceh, North Sumatra, and West Sumatra). The Search and Rescue Team (Basarnas) continues to search for 212 missing people, 36 of whom are in Aceh. This disaster is estimated to have directly affected more than 3.3 million people, with a total of over 1 million people displaced across the three provinces. Tropical Cyclone Senyar and its associated storms make this disaster period one of the deadliest natural events in Southeast Asia in 2025. The cumulative death toll from Cyclone Senyar and associated storms (including in Thailand, the Philippines, Vietnam, and Sri Lanka) is estimated to exceed 2, 370. This figure demonstrates the scale and severity of this climate disaster, which transcends national borders, necessitating regional cooperation in recovery efforts. (Photo by Aditya Sutanta/ABACAPRESS.COM)
The Darul Mukhlisin Islamic Boarding School in Menang Gini Village, Aceh Tamiang, witnessed the ferocity of Tropical Cyclone Senyar, which struck the Asia Pacific region, including Indonesia. It hit on December 14, 2025, causing massive damage. According to data from the Indonesian National Disaster Management Agency (BNPB), 1, 016 people have died in three provinces (Aceh, North Sumatra, and West Sumatra). The Search and Rescue Team (Basarnas) continues to search for 212 missing people, 36 of whom are in Aceh. This disaster is estimated to have directly affected more than 3.3 million people, with a total of over 1 million people displaced across the three provinces. Tropical Cyclone Senyar and its associated storms make this disaster period one of the deadliest natural events in Southeast Asia in 2025. The cumulative death toll from Cyclone Senyar and associated storms (including in Thailand, the Philippines, Vietnam, and Sri Lanka) is estimated to exceed 2, 370. This figure demonstrates the scale and severity of this climate disaster, which transcends national borders, necessitating regional cooperation in recovery efforts. (Photo by Aditya Sutanta/ABACAPRESS.COM)

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Destructive financing flowing into Indonesia’s forest and agricultural sectors is outpacing conservation by more than 13 to 1, leaving the country US $5 billion short of what is needed to meet national forest targets. That is according to WWF Indonesia Sustainable Finance Manager Risyad Tri Setiaputra, who spoke at “Closing the Forest Financing Gap in Indonesia” in Jakarta yesterday.

“Right now, destructive financing outweighs conservation funding. If this imbalance is not corrected, achieving national environmental goals will become increasingly difficult,” Risyad said.

A joint study by WWF and the Conservation Strategy Fund found that positive financial flows to the forestry sector reach US $244 million per year, whilst negative flows — driven overwhelmingly by land-based private sector activity — total US $3.4 billion, a ratio the researchers say is structurally embedded in Indonesia’s financial architecture rather than incidental to it.

CSF Indonesia Country Director Desta Pratama said the scale of the disparity made redirecting investment away from destructive activities a policy imperative. “Shifting investment priorities is crucial to reduce pressure on forests and ensure financing supports long-term ecosystem sustainability,” he said.

The study also found Indonesia requires US $5.3 billion annually to honour its national forestry policy commitments — a figure that places the financing shortfall beyond what enforcement action alone can close. Risyad said the transformation of the financial system itself was essential, identifying green bonds and credible carbon markets as the primary instruments, alongside mandatory transparency standards and enforceable environmental risk management obligations across the private sector.

WWF and CSF argue that without coordinated reform spanning government, industry, and civil society, Indonesia’s forests, which support biodiversity, regulate water systems, and anchor the livelihoods of millions of rural communities, will continue to absorb the cost of a financing system that is built against them.

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  • MASTER BRAND MARK POS RGB e1676449549955

    Wood Central is Australia’s first and only dedicated platform covering wood-based media across all digital platforms. Our vision is to develop an integrated platform for media, events, education, and products that connect, inform, and inspire the people and organisations who work in and promote forestry, timber, and fibre.

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