Jakarta, 11 May 2022 -- PT Bank Negara Indonesia (Persero) Tbk or BNI (stock code: BBNI) has again strengthened its commitment to the green banking segment by offering green bonds of a maximum of Rp 5 trillion. As a green banking pioneer, BNI became the first national bank to issue green bonds denominated in rupiah. The funds raised will be used to finance and refinance projects in the Environmentally Friendly Business Activities (KUBL) category.
Meanwhile, these debt securities are offered in 3 series, namely series A with a term of 3 years, series B with a term of 5 years, and series C with a term of 7 years. KUBL categories include projects related to renewable energy, energy efficiency, waste-to-energy processing and waste management, sustainable use of natural resources and land use, land and water biodiversity conservation, environmentally friendly transportation, sustainable water and wastewater management, adaptation to climate change, environmentally friendly buildings, and sustainable agriculture.
In relation to KUBL financing, BNI has developed a Green Bond Framework in which there are arrangements regarding the project selection mechanism and the use of funds as well as reporting mechanisms obtained from the Green Bond Public Offering.
BNI Deputy President Director Adi Sulistyowati said that green banking is one sector that is included in the very strategic category for BNI. In addition to the very high benefits for long-term economic stability and sustainability, the company has many customers, debtors, and partners who can be invited to jointly encourage the realization of a green economy in Indonesia.
“Green Economy is one of BNI's long-term commitments. Of course, we will use all of the Green Bond Public Offerings for financing and refinancing projects in the KUBL category as directed by the government and authorities," said Adi Sulistyowati, who is familiarly called Susi in the Public Expose and Initial Offering of BNI Green Bonds, Wednesday (11/5/2022).
Furthermore, Susi said that there had been significant developments in the technology, information, and economic sectors in the last 20 years. Ideally, this rapid development must have sustainable growth to preserve the environment so that it can always meet human needs. In this regard, BNI as a financial institution that acts as an intermediary is ready to channel investments in environmentally sound assets.
Susi conveyed that the Financial Services Authority (OJK) also issued a Roadmap for Sustainable Finance Phase I (2015-2019) and Phase II (2021-2025), with the aim of increasing awareness and capacity of the financial services sector to operate in an environmentally friendly manner. The sustainable finance initiative developed through the OJK Phase II Roadmap will integrate seven main components in one ecosystem, consisting of policies, products, market infrastructure, coordination between ministries/agencies, non-government support, human resources, and awareness.
According to Susi, BNI will contribute to product development and market infrastructure, as well as funding projects that will help realize a more environmentally sound Indonesia in the future, such as in the energy and transportation sectors. "In response to the request from the Indonesian government and the OJK, the Company, as an intermediary for sustainable growth in Indonesia, is committed to supporting environmentally sound financing," he added.
Company Philosophy
She said that the Company's approach is based on the philosophy of the triple bottom line or 3P, namely people, planet and profit, which states that projects sponsored by BNI will provide benefits to the affected communities and the environment in addition to financial benefits.
“We also use Environmental and Social Safeguards guidelines and frameworks to achieve this commitment, which are consistent with state law and are subject to periodic evaluation. These frameworks and guidelines are referred to as the Environmental and Social Management Framework and Environmental and Social Management Systems,” she added.
BNI recorded a positive performance record from both the expansion of its green portfolio as well as the implementation of ESG in all business lines. BNI's green portfolio reached Rp 170.5 trillion in Q1 2022. This value accounts for 28.9% of BNI's total loan portfolio.
This green financing is mainly provided for the needs of the community's social and economic development through MSME financing with a total portfolio of Rp 115.2 trillion. The rest is used for the development of green environmental ecosystems, new renewable energy of Rp 10.3 trillion, pollution management of Rp 6.8 trillion, and water and waste management of Rp 23.3 trillion.
The positive performance of green financing, supported by high social and environmental concerns, as well as superior corporate governance practices, has encouraged BNI's ESG rating to increase from MSCI to A since November 2021. The A rating is currently the highest among Indonesian banks, as well as confirming the position of we are pioneers in implementing sustainable finance. (*)