Pinsent Masons advises IFC on multimillion green and social bond issuance in Indonesia

The firm advised IFC on all aspects of its first-of-a-kind investment in PT Bank BTPN Tbk’s $500m issuance of five-year green and social bonds. The investment supports the environmental and social financing goals of both institutions.

BTPN, a subsidiary of Japanese banking giant, SMBC, will use funds raised by the issuance to grow its sustainable portfolio by funding projects that support renewable energy, energy efficiency, climate-smart agriculture, and sustainable building and mobility. No less than 50% will be women-owned micro, small or medium sized enterprises.

The Pinsent Masons team was led by partner James Harris and included Tony Nicholson, and Qiyu Lu.

James Harris said: “Green and social bonds are important initiatives to encourage the uptake of new finance products targeted at climate change and social good. This is particularly true for nations such as Indonesia, which has the largest economy in Southeast Asia. This deal is a strong example of how thematic bond issuances can be a powerful driver to encourage capital market growth and contribute to net zero goals.”

The investment from IFC, a member of the World Bank Group, will support Indonesia's goal for greener growth, aligning with the Government of Indonesia's Paris Agreement commitments. The bond will be used to finance green projects, including renewable energy, energy efficiency, green buildings, and clean transportation, among others. It will help bridge financing gaps for climate mitigation and adaptation and is expected to result in total projected greenhouse gas emissions reduction equivalent to 137,326 tons of CO2 per year.

Pinsent Masons has recently advised IFC on a number of landmark impact financing transactions across Asia-Pacific, including its investment in Mongolia’s first ever green bond issuance.