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IFC Invests in Bank OCBC NISP for Pioneering Green Bond


In Jakarta:
M Shahreza Hoesin  

Phone: +622129948078
E-mail: rhoesin@ifc.org


Jakarta, August 1, 2018—IFC, a member of the World Bank Group, has committed US$150 million in a green bond issued by PT. Bank OCBC NISP Tbk (“Bank OCBC NISP”), one of Indonesia’s largest private sector banks. The bond is the first ever green bond issued by a commercial bank in Indonesia, delivering a new source of green financing to combat climate change.
 
The pioneering green bond, with a five-year tenor, will see Bank OCBC NISP fund climate smart projects, supporting the Government of Indonesia’s priority of achieving a sustainable economic growth and will also contribute to the government’s target of 29 percent reduction in greenhouse gas emissions by 2030.
 
“This is a major milestone for the Indonesian banking sector as it’s expected to catalyze the development of the green bond market in Indonesia,” said IFC’s CEO Philippe Le Houérou. “In a country where green financing is relatively low, this first ever green bond by a commercial bank marks the first step in unlocking the potential of the green bond market in Indonesia to spur new financing for climate smart projects. IFC is in discussions with other players and keen to provide investment and advisory support to help develop green financing products in the country”  
 
IFC estimates the potential opportunities in Indonesia for green financing are around $274 billion to 2030.
 
In addition to its commitment to fund the first ever bank green bond, IFC will support Bank OCBC NISP with advisory work on green financing including identifying and reporting green assets. Proceeds from the green bond will be used to finance climate related projects in accordance with the Green Bond Principles.
 
“We realize that sustainability is a long journey and the pioneering green bond is an early step for Bank OCBC NISP to help our clients to do business in more sustainable way and to contribute on positive development impacts and governments goals”, said Parwati Surjaudaja, President Director of Bank OCBC NISP. “Together with IFC we are looking forward to further collaborate and find innovative solutions that widen opportunities for economically, socially, and environmentally sustainable private investment.”  

In a bid to spur new sources of financing to help Indonesia meet its climate and infrastructure challenges, IFC has supported the government of Indonesia, and its regulatory body, Otoritas Jasa Keuangan OJK, to develop a sustainable financing roadmap for Indonesia, along with green bond guidelines and a policy which obliges Indonesian banks to develop and report on their sustainable financing programs.
 
In collaboration with the World Bank, IFC has also worked to build up the capacity of the public and private sectors in green financing. The World Bank also supported the government of Indonesia issue the first ever sovereign green Sukuk bond by any government. IFC’s investment in OCBC NISP will also help create a new asset class to channel long term finance to combat climate change.
 
The World Bank Group estimates that by the end of this century climate change could cost Indonesia between 2.5 percent and 7 percent of GDP.  

About IFC

IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In fiscal year 2018, we delivered more than $23 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit
www.ifc.org

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Overview of Bank OCBC NISP

Bank OCBC NISP was established in Bandung in 1941 with the name as Nederlandsch Indische Spaar en Deposito Bank. As per June 2018, Bank OCBC NISP serves its customers through 315 offices located in 61 cities throughout Indonesia, supported by 719 units of OCBC NISP ATM with additional access to a network of more than 179,000 units of ATM throughout Indonesia, and also connected to more than 900 OCBC Group ATM network throughout Singapore and Malaysia. Bank OCBC NISP is rated idAAA (stable) from PT Pemeringkat Efek Indonesia (PEFINDO) and AAA (idn) / stable from PT Fitch Ratings Indonesia.