The fund will be allocated to advance GRP’s sustainable initiative, including the recently inaugurated Light Section Mill (LSM) facility.
Heaptalk, Jakarta — Indonesia-based private steel producer PT Gunung Raja Paksi Tbk (GRP) has performed an Environmental, Social, and Governance (ESG) collaboration with PT Bank Negara Indonesia Tbk (BNI) to expedite a sustainable economy in the archipelago.
This early strategic collaboration was marked by the direct visit of the Director of Enterprises and Commercial Banking of BNI, Muhammad Iqbal, and the General Manager of the Enterprise Banking Division of BNI, Rangga Bhirawa, into the Gunung Raja Paksi company, located in West Cikarang, Bekasi (12/28).
In more detailed cooperation, the national banking company has poured a Sustainability Linked Loan (SSL) facility worth US$32 million, or approximately Rp500 billion, toward this Gunung Steel Group member, GRP. This five-year bilateral credit disbursement has been officially signed last June 2022. The fund will be allocated to advance sustainable initiatives of GRP, including the Light Section Mill (LSM) facility that was recently inaugurated.
Perceiving a suitable business scheme related to SDG goals, The Director of Enterprises and Commercial Banking of BNI voiced the GRP is considered a capable company in implementing production methods to be more sustainable.
“We appreciate this fantastic opportunity to bolster the green economy realization in the country. We further would optimize the value chain financing potential of the company, payment channel, supply chain financing, and People’s Business Credit (KUR) to the partner and employee’s consumer product, including the capital and loan, through solid digital access for GRP corporate,” added Director Iqbal.
Furthermore, the Chief Financial Officer of GRP, Raymond Wong, explained this strategic partnership is a series of company initiatives following the ESG Strategy Handbook inauguration last October that proceed by cooperating with PT ERM Indonesia. Raymond also added independent parties and international scale execute the ESG Risk Rating assessment process. He claimed the company would earn further economic incentives by submitting both reports to the banking parties.
Moreover, according to the PwC and the Indonesian Iron and Steel Industry Association (IISIA), steel utilization in Indonesia has reached around 18.1 million tons, growing 7.6% compared to the previous year. The equivalent study also projects that steel consumption is predicted to attain 125 million tons by 2050. This estimation is mainly encouraged by the construction industry, with a high steel demand of up to 75%.
For this reason, GRP company continues to boost Indonesia’s government in reaching a Net Zero Emission (NZE) by 2060 through the operations efficiency elevation by diminishing the energy consumption. Through the US$32 million sustainability-linked loan from BNI, Raymond has the powerful confidence to accelerate the decarbonization effort in Indonesia.
