JAKARTA - PT Jaya Bumi Paser (JBP), which is a subsidiary of PT Indika Energy Tbk (INDY), obtained a loan facility of US$ 27.5 million from Bank DBS Indonesia. This facility is a combination of short and long term funding for various company activities.
The signing was carried out by the Director of JBP, Dominicus Wimbuh Wibowo and the Head of Institutional Banking Group Bank DBS Indonesia, Kunardy Lie.
This funding is intended to finance the development of new and renewable energy sources based on sustainable biomass and apply the Forest Stewardship Council (FSC) standards by JBP in East Kalimantan.
Head of Institutional Banking Group Bank DBS Indonesia, Kunardy Lie said, "This is in line with Indika Energy's commitment and support to encourage investment in energy transition efforts, as well as support the achievement of the national emission reduction target of up to 29 percent with its own efforts or up to 41 percent and international assistance. by 2030 as stated in the Nationally Determined Contribution (NDC) document.
"Sustainable financing is an important element in supporting the transition of national energy from fossil fuel-based energy to green energy sources that are low-carbon and environmentally friendly," he said in a statement received by VOI, Monday, April 18.
This sustainable financing does not only consider financial benefits in making investment decisions, but also environmental, social, and governance factors known as ESG as a parameter of company sustainability.
He further explained that the collaboration between Bank DBS Indonesia and Indika Energy is a transition financing intended to fund the project to develop new and renewable energy sources based on biomass, namely wood pellets that will be carried out by JBP.
JBP is a company holding a Forest Utilization Permit (PBPH) which has an industrial plantation forest concession of 23,590 ha in East Kalimantan, which is currently planted with calliandra trees to be used as raw material for wood pellets as biomass energy.
In this project, JBP will apply FSC standards starting from mapping the project area, land clearing, planting, harvesting to the wood pellet production process. JBP is currently in the process of obtaining FSC certification.
The wood pellet product produced by JBP can be used as a source of fuel in the Biomass Power Plant (PLTBm). Wood pellets are categorized as sustainable green energy because the raw materials are non-fossil and the process from planting to harvesting takes a fairly short time, which is 1 to 2 years.
"Transition financing makes the banking industry play a key role in promoting and participating in maintaining environmental sustainability and balance," he said.
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Now more and more companies understand the importance of ESG aspects in their operations, and one of the urgent things is to green up the industrial sector that is responsible for intensive carbon emissions.
"Here, the role of the financial sector is to help transition companies that are initially carbon-intensive and start moving away from fossil fuels. This is also in line with our commitment to support the government in accelerating the implementation of sustainable finance in Indonesia," he concluded.
Meanwhile, Indika Energy is also committed to achieving carbon neutrality by 2050. Indika Energy strives for this by undertaking various sustainability initiatives in its operations, including a focus on ESG aspects. In addition to its carbon neutral commitment, Indika Energy is also committed to increasing the contribution of the non-coal sector to 50 percent of total revenue by 2025.
"We are very enthusiastic about this partnership because it is the first transition financing for Indika Energy and Bank DBS Indonesia. We hope this is a good start for Indika Energy's sustainable business development going forward," he concluded.
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