IFC, a member of the World Bank Group and Indonesian lender PT Bank OCBC NISP have extended a $53 million sustainability-linked loan (SLL) with an 11-year tenure to Warburg Pincus-backed retail and logistics property platform PT Nirvana Wastu Pratama (NWP) Property.
The loan, IFC’s first sustainability-loan in Indonesia, will be used to expand green building certification of the firm, according to an announcement on Thursday.
In May 2024, DealStreetAsia reported that IFC was considering extending a $53-million sustainability-linked loan facility to NWP that will be used to refinance NWP’s retail mall and hotel property assets in Indonesia.
IFC and NWP’s partnership will provide clear technical guidance on establishing and achieving sustainability performance goals and will improve NWP’s sustainability-linked finance framework to align with IFC’s green building and investment standards.
The loan is connected to two specific sustainability performance targets. Existing assets that have been operating for over three years must achieve a 42% absolute emissions reduction by 2030, compared to the 2019 benchmark.
NWP has been an early adopter of the EDGE green building tool and certification programme in Indonesia. Since 2017, the company has obtained EDGE certifications for eleven assets, with six more registered for certification by 2027.
EDGE Advanced certification is a green building certification developed by the IFC and stands for Excellence in Design for Greater Efficiencies (EDGE), which promotes sustainable and resource-efficient buildings in emerging markets.
The building and construction sector plays a crucial role in Indonesia’s economic growth and sustainable development. It is also a major contributor to greenhouse gas (GHG) emissions of 23% of the country’s energy consumption in 2021 and is projected to rise to 40% by 2030.
“This investment aligns with IFC’s strategy for Indonesia, which prioritizes the decarbonization of urban environments and climate resilience through investment and advisory support,” said Euan Marshall, IFC’s Country Manager for Indonesia and Timor-Leste in a statement. “Financial barriers remain one of the biggest obstacles to adopting green building practices in Indonesia. To address this challenge, there is an urgent need for specialized financing solutions, including sustainability-linked financing.”
IFC is the world’s largest development institution dedicated to the private sector in emerging markets. In fiscal year 2024, IFC committed $56 billion to private companies and financial institutions in developing countries, leveraging private sector solutions and mobilising capital to foster a world free of poverty on a sustainable planet.
Established in 2015 as a joint venture between Warburg Pincus and PT City Retail Developments, NWP operates last-mile logistics facilities and distribution centres as well as an independent network of modern, community-based shopping malls.
NWP Property has over 50 shopping malls and logistics assets in its portfolio, totalling over 1 million square meters of gross floor area.
NWP Property had secured $135 million as a sustainability-linked syndicated loan facility from a group of lenders led by CIMB Bank Singapore in June 2024.
