Jakarta/London, 24 November 2020 – Edwin Syahruzad, the President Director of PT Sarana Multi Infrastruktur (“PT SMI”), and Justine Leigh-Bell, the Deputy CEO & Director of Market Development at Climate Bonds Initiative (“CBI”) signed a Memorandum of Understanding (MoU), and a Non-Disclosure Agreement (NDA) in Jakarta, on November 24 2020.
The purpose of this MoU is to;
(1) promote green infrastructure project pipelines to institutional investors,
(2) deliver capacity building for potential green bond issuers, and green investment businesses, and to
(3) drive the growth of the green bond market in Indonesia.
To support a green stimulus, and for Indonesia to achieve its climate targets between 2020 – 2024, Indonesia requires a total funding of USD 18.5 billions per year between the 2020 – 2024 period. Private sector and international funding have a crucial role to support Indonesia to achieve its climate targets through financial instruments such as green bonds, green loans, and green sukuk.
Indonesia has an expansive green infrastructure pipeline, open for investment through green financial instruments, as reflected in Climate Bonds Green Infrastructure Investment Opportunities (GIIO) Indonesia reports of 2018 and Update in late 2019. To date, Indonesia has issued 6 green bonds and green sukuk to the value of USD 3.7 billions.
One of the green bonds was issued by PT SMI a Ministry of Finance Special Mission Vehicle (“SMV”) with a value of IDR 500 billion (USD 34.9 million). This issuance makes PT SMI a pioneer in sustainable financing in Indonesia. The green bond that was issued by PT SMI is aligned with the GBP and ASEAN Green Bond Standards, making Indonesia as one of the first Southeast Asian nations to align with both standards. PT SMI green bonds proceeds were used to re-finance Light Rail Transit (LRT), and two mini-hydro projects in Bengkulu Province, and South Sumatera Province.
Edwin Syahruzad, the President Director for PT SMI stated, “As the Special Mission Vehicle (SMV) of the Ministry of Finance, PT SMI’s objective is to accelerate the economy, and deliver social benefits for society, support the achievements of Sustainable Development Goals (SDGs) and mitigate effects from climate change. PT SMI acts as a sustainability promoter, deepening the sustainable finance market in Indonesia and driving more issuers to tap into the capital market through increased green bond issuance in Indonesia.”
Sean Kidney, CEO of Climate Bonds Initiative, concurs, “Indonesia needs sustainable development – growth that improves lives while creating a world we truly want our children to live in. PT SMI and the Climate Bonds Initiative will be working together to deliver that future.”
The government of Indonesia expressed its commitment to support green recovery and low-carbon investment, as reaffirmed by the Republic of Indonesia Minister of Finance, Sri Mulyani Indrawati at the High Level Opening Dialogue of Green Climate Fund Private Investment for Climate Conference. The Minister said that, “I believe that the implementation of green recovery will be the driver for the world’s economic transformation. Indonesia has been and will continue to be committed to reducing our carbon emissions in addition to achieving a climate-resilient nation. Policy makers must examine much more closely the planning for a green economic recovery package from a long-term planning perspective to build a sustainable economy.”
For more information, please contact:
Head of Communications & Media,
Climate Bonds Initiative (London)
+44 (0) 7914 159 838
ASEAN Programme Analyst
Climate Bonds Initiative
+62 (0) 811 9890 068
Notes for journalists:
About the Climate Bonds Initiative: Climate Bonds Initiative is an investor-focused not-for-profit, promoting large-scale investment in the low carbon economy. Climate Bonds undertakes advocacy and outreach to inform and stimulate the market, provides policy models and government advice, market data and analysis, and administers an international Standard & Certification Scheme for best practice in green bonds issuance. For more information, please visit www.climatebonds.net.
About PT SMI: PT SMI is one of the Special Mission Vehicles (SMV) under the Ministry of Finance which is engaged in financing and preparing infrastructure projects. Established on February 26, 2009, PT SMI is a State-Owned Enterprise (BUMN) whose entire share capital is owned by Republik Indonesia through the Ministry of Finance. PT SMI was formed based on Minister of Finance Regulation No. 100/PMK.010/2009 concerning Infrastructure Financing Companies.
PT SMI is an infrastructure financing State Owned Enterprise (SOE) wholly owned by the Government of Indonesia Ministry of Finance. PT SMI is mandated to engage in financing and preparing infrastructure projects, especially projects that align with the sustainable infrastructure concepts and contribute to achieving the Sustainable Development Goals (SDGs) in Indonesia. The entity supports the Government of Indonesia’s infrastructure development agenda by financing national or local infrastructure projects, developing infrastructure projects, and providing financial advisory. More information can be found here.
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