T

he Indonesian Export Financing Agency (LPEI), in collaboration with the Asian Development Bank (ADB), launched on Friday its first energy efficiency financing by channeling the equivalent of Rp 16 billion (US$1.31 million) in funding to publicly listed food company PT Tiga Pilar Sejahtera Food (AISA).

The funds are part of the ADB'€™s $30 million commercial financing, provided under the bank'€™s energy efficiency project finance program (EEPFP), to the LPEI.

Made Gde Erata, president director of the LPEI more commonly known as Eximbank, said the EEPFP was aimed at reducing energy costs to eventually help companies boost their exports.

He said the agency also planned to disburse the loan money to its clients in other business sectors, adding that some of them had expressed an interest in joining the program.

'€œIt just so happens that the companies currently in the pipeline operate in the food sector as well, namely Garuda Food and CV Prima,'€ he told reporters.

Meanwhile, the financing facility provided to Tiga Pilar will mature after five years. Under the loan agreement, the firm is required to implement six energy efficiency measures, including the installation of a lighting retrofit, insulation and temperature-control equipment.

Tiga Pilar president director Joko Mogoginta said the energy-related expenses amounted to between 3 and 4 percent of its total costs, making them the company'€™s third-largest expense after raw materials and labor.

The new measures, he said, would help the firm save up to Rp 6.3 billion in energy costs every year. '€œHopefully, we will start to see results right after the installations,'€ he said.

Tiga Pilar runs three main business divisions, namely food, rice and palm oil. In food, its product lines include noodles, candies, snacks and biscuits.

Its financial results show that Indonesia remains its biggest market, making up more than 90 percent of its sales portfolio. According to Joko, Tiga Pilar aimed to increase its export contribution to 10 percent within the next two to three years.

'€œRight now, our exports consist of snacks and fortified biscuits, which are produced for the UN'€™s World Food Program. The biscuits are exported to countries such as Afghanistan and Iraq,'€ he said.

Meanwhile, speaking after the agreement'€™s signing, Madeleine Varkay, the ADB'€™s principal private sector development specialist for Southeast Asia, said the loan channeled by the LPEI to Tiga Pilar was the first implementation of the ADB'€™s energy efficiency program in Indonesia.

In Southeast Asia, according to Varkay, the bank had channeled $1 billion overall in its energy efficiency and renewable energy program.

'€œAs a fast-growing economy, Indonesia has tremendous energy needs. If the program is implemented across various industries, we may create a virtual power plant with capacity of up to 2,500 megawatts,'€ Varkay said. She added that the ADB would continue to strengthen the program in the hope that it would attract other firms in energy-intensive sectors, such as textiles, cement and steel.