Heaptalk, Jakarta — In a strategic move to support sustainable development and expedite Indonesia’s transition to a low-carbon, the International Finance Corporation (IFC) announced its first Sustainability-Linked Loan (SLL) to enhance green building certification within the portfolio of PT Nirvana Wastu Pratama (NWP).
This financing will enable NWP to decarbonize its property portfolio by improving energy efficiency, reducing greenhouse gas (GHG) emissions, and obtaining internationally recognized green building certification through IFC’s EDGE (Excellence in Design for Greater Efficiencies) program. As a member of the World Bank Group and the largest global development institution focused on the private sector in emerging markets, IFC, together with PT Bank OCBC NISP, has extended NWP a $53 million sustainability-linked loan with an 11-year tenor.
“IFC’s support will help us implement superior green building practices and set a new industry benchmark in Indonesia. We firmly believe this joint effort will significantly reduce GHG emissions across our projects while contributing to local economic development.” CEO and President Director of NWP, Kevin Kow, said.
The partnership between IFC and NWP also includes structured technical guidance to define and achieve sustainability performance targets, further reinforcing the framework for sustainable finance in alignment with green building and IFC investment standards. The loan is structured around two key sustainability performance targets: operational assets over three years must achieve an absolute emissions reduction of 42% by 2030 compared to a 2019 baseline, while new or majorly renovated projects must attain EDGE Advanced certification.
As is known, the construction and building sector plays a crucial role in Indonesia’s economic development and sustainability agenda. However, it is also a major contributor to GHG emissions, accounting for 23% of Indonesia’s energy consumption in 2021, with projections suggesting an increase to 40% by 2030.
This investment marks another step in IFC’s ongoing commitment to climate financing in Indonesia. By expanding access to innovative financial solutions like this SLL, IFC is fostering the transition to a low-carbon economy and mitigating financial constraints that have historically hindered the adoption of green building practices.
“This investment aligns with IFC’s strategy in Indonesia, which focuses on urban decarbonization and climate resilience through investment and advisory support. Financial barriers are often cited as one of Indonesia’s biggest challenges to implementing green building practices. Addressing this requires tailored financing mechanisms, such as sustainability-linked financing.” said Euan Marshall, IFC’s Country Manager for Indonesia and Timor-Leste.
