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Effective green bond: BNI’s targeted sector
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BNI says it is optimistic about the lender’s improved performance because of its utilization of green bonds.
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T Bank Negara Indonesia Tbk (BNI) is optimistic regarding the acceleration of its green banking performance this year, as it is in line with the effectiveness of BNI’s Rp 5 trillion (US$336.42 million) green bond.
Corporate Secretary BNI Mucharom said BNI’s green financing growth continued to develop and was in line with the sustainable credit agreements that were still running aggressively in both the micro, small and medium enterprise (MSME) and corporate segments in the first half of this year.
BNI also believes that green banking is the future of national banking. Moreover, the economic concept that will be utilized in the future is a circular economy, which is an economic ecosystem that champions recycling various wastes as raw materials to reduce the overexploitation of natural commodities. This economic model is putting forward efficiency in reducing the effect of household waste.
“We are grateful and of course very proud because we have succeeded in issuing green bonds. This is multiplied by the overwhelming response and appreciation by oversubscription, which increased fourfold. Of course, the funds raised will be used directly to encourage stronger green banking performance," Mucharom said.
He added that BNI would utilize financing and refinancing projects in the environmental business activities (KUBL) category related to renewable energy, energy efficiency, waste processing into energy and waste management, use of natural resources and sustainable land use.
“Funds from the green bond will also be channeled to land and water biodiversity conservation projects, environmentally-friendly transportation, sustainable water and wastewater management, climate change adaptation, environmentally friendly buildings and sustainable agriculture, taking into account OJK [Financial Services Authority] Regulation No. 60/2017 concerning the issuance and requirements for green bonds," he said.
Mucharom explained that the first quarter of 2022 saw BNI recording a positive performance record both from the expansion of its green portfolio and the implementation of ESG in all business lines. BNI's green portfolio reached Rp 170.5 trillion, accounting for 28.9 percent of BNI's total loan portfolio.
“This green financing mainly provides 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, Rp 10.3 trillion for new and renewable energy, Rp 6.8 trillion for pollution management and Rp 23.3 trillion for water and waste management.”
