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IFC to invest $500m in BTPN for green, MSMEs loan
The IFC will invest up to US$500 million in BTPN to be channeled into green and social loans for renewable energy projects and woman-run MSMEs.
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Logo of PT Bank Tabungan Pensiunan Nasional (BTPN) (Courtesy of/Bank BTPN)
The International Finance Corporation (IFC) announced on Thursday it will invest up to US$500 million in publicly listed bank BTPN to be used to fund green projects and micro, small and medium enterprises (MSMEs), which it labels as social projects.
The investment was made possible through a bond issuance by the IFC that it categorized as ‘thematic bonds’ since the money is designated for specific purposes, such as sustainability, climate change or gender equality, among other themes.
“We are ready to take risks that, maybe, traditional banks are not ready to take. So, this is one of the value propositions that we have,” IFC managing director Makhtar Diop told The Jakarta Post on May 16 ahead of the announcement.
The IFC said the deal had been given regulatory approval by the Financial Services Authority (OJK) on Tuesday.
The IFC said Indonesia’s financing for both green projects and MSMEs had been inadequate. It pointed out that the country’s private banking portfolio for the green sector only contributed around 9 percent of the total investment needs that were required to achieve Indonesia’s 2030 climate goals.
Meanwhile, the financing gap for MSMEs is estimated at $166 billion, or about 19 percent of the country’s gross domestic product (GDP).
