PT Bank SMBC Indonesia (BTPN), in collaboration with Sumitomo Mitsui Banking Corporation (SMBC), has announced its commitment to supporting Indonesia’s transition to net zero emissions.
Originated in Japan, SMBC was formed in 2001 through the merger of Sakura Bank and Sumitomo Bank. Leveraging expertise from SMBC’s global operations, the bank aims to drive sustainability initiatives across Indonesia.
Henoch Munandar, President Director of SMBC Indonesia, revealed that the bank had secured a US$500 million (Rp7.96 trillion) funding agreement with the Africa Finance Corporation (AFC).
This makes SMBC Indonesia the first bank in the country entrusted by the AFC. The funds are designated for green and social projects, aligning with Indonesia’s sustainability targets.
“SMBC Indonesia offers comprehensive solutions for corporate clients seeking to transition to renewable energy. Collaborating with SMBC’s global network allows us to facilitate impactful change,” Henoch told a press conference in Jakarta on Tuesday, December 3, 2024.
Henoch emphasized that the bank’s initiatives are part of a broader sustainable financing framework, which has become a standard practice in the banking industry.
SMBC Indonesia is also exploring various funding avenues, including bond issuance, to support these efforts while navigating market dynamics.
NZE targets
President Prabowo Subianto recently affirmed Indonesia’s commitment to achieving net zero emissions (NZE) by 2050, a decade earlier than previously planned.
Speaking at the G20 Summit in Brazil, Prabowo outlined a vision to phase out coal and fossil fuel power plants within 15 years and develop 75 gigawatts of renewable energy capacity.
“Indonesia, with abundant renewable resources such as solar energy due to its equatorial location, is well-positioned to lead in green energy,” Prabowo said on November 20, 2024.
He also highlighted Indonesia’s significant greenhouse gas emissions and its global role as a major coal exporter.
While Indonesia is one of the world’s largest greenhouse gas emitters, it also boasts the third-largest rainforest, offering substantial carbon absorption potential.
The nation’s current installed power capacity exceeds 90 GW, with over half derived from coal and less than 15 percent from renewable sources.
SMBC Indonesia’s initiatives, combined with the government’s aggressive policy shifts, aim to accelerate the country’s green energy transition while reducing its reliance on fossil fuels.
