Suara.com – PT Pupuk Indonesia (Persero) signed a memorandum of understanding (MoU) in collaboration with PT Bank Mandiri (Persero) Tbk, for the preparation of an Environmental, Social, And Good Governance (ESG) Framework and the potential for providing green financing based on Sustainability Linked Loans.
The signing of the MoU was carried out by the President Director of Pupuk Indonesia, Rahmad Pribadi with the President Director of Bank Mandiri, Darmawan Junaidi in Dubai, United Arab Emirates (UAE).
After the signing, Rahmad said that Pupuk Indonesia together with Bank Mandiri have aligned goals, namely building a sustainable business by paying attention to Environmental, Social, and Governance (ESG) aspects.
“To realize its vision as a global fertilizer and petrochemical industry, currently Pupuk Indonesia is focusing on the power to accelerate and create a new future through downstream industries that are more environmentally friendly. So that the implementation of ESG aspects becomes a very important instrument in future business development,” said Rahmad in his written statement, Saturday (2/12/2023).
This collaboration, continued Rahmad, is part of Pupuk Indonesia’s program to reduce carbon emissions which is in line with the theme of COP28 or the current United Nations (UN) high-level conference in Dubai. At COP28, top world leaders discussed and collaborated on ways to limit and prepare to mitigate the impacts and risks of climate change in the future.
In this collaboration signed with Bank Mandiri, Bank Mandiri will channel financing to Pupuk Indonesia by obtaining financing based on the Sustainability Linked Loan scheme for various projects related to the sustainable ESG program.
These include the Gresik & Bontang soda ash investment project, new renewable energy (EBT), financing related to green development, as well as sustainable management of biological natural resources.
For information, Sustainability Linked Loan is a financing instrument from financial banking that provides incentives to debtors to achieve predetermined sustainable performance goals.
With this financing, Bank Mandiri and Pupuk Indonesia have agreed to determine the implementation of sustainability targets that must be achieved by Pupuk Indonesia.
In this agreement, he added, there are components of the agreement in the form of sustainability aspects, such as reducing carbon emissions and also transitioning towards more responsible, environmentally friendly business activities that have a positive impact on the environment and society as well as social issues.
Meanwhile, the cooperation signed at COP28 encourages Pupuk Indonesia’s potential to become a major player in the clean, new and renewable energy sector as well as the energy transition towards a low-carbon energy system.
Currently, Pupuk Indonesia together with several strategic partners is studying and developing clean energy infrastructure, namely green hydrogen, blue ammonia, green ammonia and green methane.
The development of green industry requires large investment values. Not only is there a need for capital expenditure, but also investment for research and development.
Therefore, collaborative cooperation with banks which are currently also intensively providing green financing distribution is essential in one of the efforts to fulfill these needs.
“Because in the future, Pupuk Indonesia strives to become a pioneer of green industry and with low-emission operational transformation by building more efficient fertilizer factories, both through revamping old factories, revitalizing them, and building new factories with technology that lowers energy consumption. Advanced ,” he concluded.