IFC Issues Indonesian Rupiah Komodo Green Bond for Investment into Renewable Projects

The International Finance Corporation (IFC), a member of the World Bank Group, has issued its inaugural Indonesian Rupiah Komodo green bond. The green bond issue has attracted strong investor demand, and has raised $134 million to combat climate change.

This is the first such green Komodo offshore Rupiah-denominated issuance by a multilateral development bank for investment into climate projects in Indonesia.

The five-year green bond will be listed on both the London Stock Exchange and the Singapore Stock Exchange. The green bond will support the local-currency market in Indonesia, funding the first-ever green bond issued in Indonesia by an IFC client, Bank OCBC NISP.

The proceeds will finance underlying infrastructure and climate-related projects, in accordance with Green Bond Principles.

“The issuance of IFC’s green Komodo bond underscores our commitment to support Indonesia in achieving environmentally sustainable economic growth,” Nena Stoiljkovic, IFC’s Vice President for Asia and the Pacific, said in a press statement.

“The bond allows us to mobilize international funding into Indonesia’s climate-friendly projects and we intend to replicate and scale up this model to address the country’s climate challenges,” added Nena.

Jingdong Hua, IFC’s Vice President and Treasurer, said, “This first-ever green Komodo bond issued in Indonesian rupiah for climate investment in Indonesia is a significant milestone for IFC and for Indonesia, helping the private sector manage foreign exchange risk through local-currency financing, while growing climate-smart business.”

Adrien de Naurois, EMEA Syndicate, BAML said, “IFC’s inaugural Green IDR offering firmly established its presence in the nascent Komodo, where it was able to take advantage of the recent stability in IDR and post Bank Indonesia’s meeting to raise 2 trillion IDR of 5-year offering. The transaction garnered strong global support and allowed IFC to push the boundaries on both tenor and size achievable in the current market environment.”

John Lee Tin, Head of SSA DCM, J.P. Morgan said, “Investors reacted positively to IFC’s debut Komodo (Indonesian Rupiah) transaction, with the euro bond issue attracting more demand than originally intended. Given current volatility in emerging markets, the deal’s oversubscription represents a high level of success. Additionally, IFC widened out the scope of its green bond reach with investors, using this as an opportunity to add a new currency, hence a new investor base, for the issuer’s climate awareness efforts.”

IFC is one of the world’s largest financer of climate projects in developing countries and has issued triple-A rated bonds in local currency in over 30 countries.

In December 2017, the first green bond was launched by a commercial bank, BDO Unibank Inc, in the Philippines and it attracted a $150 million investment from the International Finance Corporation (IFC) to help expand financing for private sector investments to address climate change.

The organization is focusing on driving the diversification of economies, promoting access to finance for small businesses and tackling climate change. In June 2018, IFC issued its first internationally rated triple-A peso-denominated green bond which is equivalent to $90 million. In September 2018, IFC announced that it has expanded its operations in Europe and Central Asia with investment commitments reaching $2.9 billion.

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