Heaptalk, Jakarta — International Finance Corporation (IFC) provided US$60 million in green financing to Indonesia’s Gunung Raja Paksi (GRP) to advance decarbonization in the archipelago’s steel industry. This partnership will boost low-carbon steel production in the country, reducing greenhouse gas (GHG) emissions and supporting the climate goals.
“Through this partnership, GRP will continue to set new bars for decarbonizing Asian steel production. This first-in-a-generation investment recognizes GRP’s early leadership as one of Asia’s first, and still very few, operators of low-carbon steel mills. The steel industry is critical to the prosperity of Asia and the wider world. We must rapidly decarbonize as a sector to withhold and grow this prosperity for future generations; if steel companies are unwilling to embrace the green transition, their assets risk becoming stranded. Sustainability has been and always will be GRP’s guide forward,” GRP’s Chairman of the Executive Committee, Kimi Tanoto, said.
In addition to the loan, IFC has signed an Advisory Engagement Letter with GRP to develop and implement its decarbonization strategy and support GRP’s measure to minimize GHG emissions in alignment with international best practices. This effort includes exploring different financing options to support GRP’s decision to entirely decommission the company’s new EAF and addressing new downstream process options and technologies.
As part of the advisory engagement, IFC will also help GRP identify new market opportunities and explore high-value steel products compatible with EAF production, thereby solidifying GRP’s leadership in national decarbonization efforts. This will support Indonesia in achieving the goal of reaching net-zero emissions by 2060.
As a member of the World Bank Group, IFC recorded US$6 billion to private companies and financial institutions in developing countries, leveraging private sector solutions and mobilizing private capital to create a world free of poverty on a liveable planet.
“Our partnership with GRP is a significant step in supporting industrial decarbonization in Indonesia and marks IFC’s first steel investment in Asia in over a decade. We are delighted to provide investment and advisory assistance to support GRP in its journey to develop a commercially and environmentally sustainable business,” IFC’s Country Manager for Indonesia and Timor-Leste, Euan Marshall, affirmed.
