Indonesia Receives IFC Green Loan to Decarbonise Retail Properties
The sustainability loan has targets to meet, including a 42% emissions reduction for older buildings by 2030.
Indonesia's building sector accounts for a large portion of energy consumption, projected to increase from 21% in 2021 to 40% by 2030.
The International Finance Corporation (IFC), the largest global development institution and part of the World Bank Group, has provided PT Nirvana Wastu Pratama (NWP) with its first sustainability-linked loan in Indonesia.
NWP deals in developing retail and logistics properties in Indonesia, and the $53 million loan will help the company decarbonise its buildings, make its operations more environmentally friendly and energy-efficient, and get green-building certification through IFC’s EDGE programme.
The company has to specifically target certain goals in the loan. For example, existing properties or buildings that are more than three years old should cut greenhouse gas (GHG) emissions by 42% by 2030 compared to 2019 levels. New buildings or those undergoing major renovations should get EDGE Advanced certification to guarantee that they meet high energy efficiency standards.
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NWP has already EDGE-certified its 11 properties, with six more planned by 2027, which is encouraging other businesses in Indonesia's building sector to incorporate more such sustainable measures to reduce the country's large share of energy consumption, which was around 21% in 2021, and, estimated to surge to 40% by 2030.
Kevin Kow, Chief Executive Officer & President Director of NWP, added: "Working with IFC is a significant milestone which exemplifies our commitment to sustainability. IFC’s support will not only help us to adopt greener building practices but also to set a new benchmark for the industry in Indonesia. We are confident that this joint effort will significantly cut greenhouse gas emissions in our projects and benefit the economic development of local communities.”
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Euan Marshall, IFC’s Country Manager for Indonesia and Timor-Leste, said: "This investment is in line with IFC's strategy for Indonesia, which includes a focus on decarbonization of the urban environment and climate resilience through investment and advisory support.
“Financial barriers are widely seen as the biggest obstacle to adopting green building practices in Indonesia. To overcome these, there is a pressing need for more specialized financing tools, including sustainability-linked financing.”
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Source: IFC
