PT Bank Mandiri (BMRI) has planned to increase financing in the mining sector, taking advantage of available opportunities as many other banks avoid jumping into this sector financing.
The mining sector is still prospective for banking as industry players push their commitment to achieve the target of net zero carbon emissions (NZE). Local banks also still see opportunities for business growth in fossil energy financing when foreign banks are starting to avoid them.
“It is opportunity because foreign banks are not playing, it means that it is the company’s job to continue being an agent of development,” Freddy Iwan S. Tambunan, Senior Vice President of BMRI, said on Monday, November 25, 2024.
However, Freddy also said that BMRI will continue financing new and renewable energy (EBT). BMRI wants coal and renewable energy financing to be balanced in accordance with the company and government’s commitment towards Advanced Indonesia 2025.
David Sumual, Chief Economist of PT Bank Central Asia (BBCA)said that the mineral and energy mining sector has promising prospects. He explained that this sector, including coal, is one of the largest contributors to Indonesia’s export value.
“For developing countries like Indonesia, the global agreement is somewhat extended. So there is still an opportunity until 2060 for net zero emissions, which is actually in accordance with the global agreement,” he said.
David added that banking relations, especially local banks, are still “very fully committed” to the mining sector, at a time when foreign banks are avoiding the sector.
BMRI currently records a total sustainable portfolio of Rp285 trillion (US$18 billion) in Q3 2024, up 12.8 percent year-on-year (YoY) compared to the same period the previous year. From this value, the composition of the green portfolio grew significantly by 16.4 percent to Rp142 trillion.
