Investor Presentaiton
Investment Landscape
Indonesia's evolving sustainable finance ecosystem should
provide fertile ground for ESG
Indonesia is among the global pioneers in thematic bonds issuance
1st global
Sovereign green sukuk
1st global
Green retail sukuk
1st
Asia
SDG-linked bond
OJK Regulation No. 60/POJK.04/2017 and related incentives defined
issuance of green bonds and helped to raise interest in sustainable finance
Sustainability bond to finance green projects, such April 2021
as renewable energy and small businesses
$1.25bn
February
2018
$300m
$104.4m
November
2019
$500m
Sustainability bond to finance environmental and
social projects
April 2019
$584m
August
2021
Rp3trn
First corporate green bond
July 2018
OJK's Sustainable Finance Roadmap Phase Il aims to accelerate ESG-related financing, 2021-25
Policy
Products
Various policies
Wide-ranging
to support
sustainable
finance
sustainable
finance
products and
services
Market
Infrastructure
Technologies and
information
infrastructure to
support sustainable
finance
Coordination
Improving
coordination and
exchange of
information among
ministries and other
stakeholders
Strengthened portfolio resilience and growing ESG focus create a
positive macroeconomic climate for private equity (PE) investments,
2021
South-east Asian PE investors grappled with unprecedented uncertainty in 2020.
In 2021 PE leaders took steps to bolster portfolio resilience and minimise
the risk of future disruptions.
A growing number of PE funds in the region are shifting to sustainable
portfolios and focusing on ESG investing.
South-east Asia's PE funds invested more than 41% of deal value, equal to $6bn, in
sustainability assets* in 2018, according to 2020 Bain & Co research. This compares
to 1% in 2010, according to the same analysis.
* Investments in a company that meets Bain & Co's sustainability criteria for developing countries
•
Non-governmental
support
Supported by research
and international
institutions to develop
sustainable finance
initiatives
Human
resources
Structured
programmes to
build internal and
external capacity
CASE STUDY: Star Energy Geothermal Group's green
bond issuance underlines appetite for Indonesian
sustainable finance
With installed geothermal capacity
of 875MW across three power
stations, in October 2020 Star
Energy Geothermal Group (SEGG)
raised$1.1bn in senior secured
green bond financing
Collateral-backed debt security
with highest priority for repayment,
therefore deemed to incur lowest
risk
Governed by a green
bond framework aligned
with International Capital
Market Association Green
Bond Principles as well as
ASEAN Green Bond
Issuer Bank
Mandiri
Issuer Bank BRI
Issuer Sarana
Multi Infrastruktur
Awareness
Communications
strategy for
sustainable
finance
Structure of $1.1bn green bond
issuance, October 2020
Co-issued by:
Star Energy
Geothermal Salak
and Star Energy
Geothermal Darajat
||
Tranche A:
Standards
•
Bonds 3.5x
oversubscribed despite
pandemic-related global
headwinds; listed on
Singapore Exchange
Tranche B:
Ratings:
$320m; 3.25%;
8.5 years
$790m; 4.85%;
18 years
Moody's: Baa3;
Fitch: "BBB-"
Financing growth
Indonesia has been a global and
regional pioneer for ESG-related
bonds issuance, including both sharia-
compliant and SDG-related financing.
National policies have helped to
increase the focus on sustainable
finance. Key among these, OJK's
regulation No. 60/POJK.04/2017
defined green bonds issuance; the
organisation's Sustainable Finance
Roadmap Phase II, 2021-25, aims to
boost ESG-related funding over the
coming years. Regional investors
have shown growing appetite for
sustainability assets in PE funds,
which rose from 1% of PE deal
value in 2010 to 41% in 2018.
Indonesia has demonstrable
potential for ESG-related financing:
SEGG's oversubscribed $1.11bn
issuance in October 2020 is one
example.
PwC
OBG ESG Report
O
OXFORD
BUSINESS
GROUP
Sources: Allen & Overy; Bain & Company; Credit Agricole; Euromoney; OJK; Reuters; SGX; Star Energy Geothermal; UNDP
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