State oil and gas company PT Pertamina launched a Sustainable Finance Framework, aimed at ensuring the company’s sustainability efforts are integrated into the company’s funding strategy, allowing Pertamina and/or Pertamina’s Subholdings/Subsidiaries to access funding for green projects and energy transition projects.
In line with Pertamina’s broader energy transition strategy, the Sustainable Finance Framework serves as a guideline for Pertamina in conducting sustainable funding in the future, including but not limited to bank loans and bonds.
“The strategic move to develop the Sustainable Finance Framework is in line with efforts to provide a broader commitment to create long-term value and sustainability for stakeholders and provide positive impact. This framework also strengthens Pertamina’s commitment to achieving the 32 percent emission reduction target from the business as usual (BAU) scenario by 2030 and supports the Indonesian government’s efforts to achieve Net Zero Emissions (NZE) by 2060 or even sooner, while ensuring national energy security,” Pertamina’s Finance Director, Emma Sri Martini said on Thursday, June 20, 2024.
ISS-Corporate, as an independent opinion provider, has released a Second Party Opinion (SPO) validating the consistency of the Sustainable Finance Framework with Pertamina’s sustainability strategy, as well as the suitability of the Sustainable Finance Framework with international sustainability funding standards, namely the Green Bond Principles (“GBP”) issued by the International Capital Market Association (ICMA) and the Green Loan Principles (“GLP”) issued by the Loan Market Association (LMA).
Through this Sustainable Finance Framework, Pertamina and/or its Subholding/Subsidiaries may issue green or transitional funding instruments to finance or refinance eligible green or transitional projects in nine categories, namely (i) renewable energy, (ii) green hydrogen, (iii) transmission and distribution networks for renewable and low-carbon gases, (iv) green buildings, (v) clean transportation, (vi) low-carbon fuels, (vii) sustainable management of living natural resources and land use, (viii) emission reduction, and (ix) transition in the shipping sector.
Implementation of the Sustainable Finance Framework also includes a robust governance and reporting process for transparency and visibility to investors and lenders on the positive environmental impact of Pertamina’s green investments or energy transition.
“The presence of the Sustainable Finance Framework is expected to be one of Pertamina’s concrete steps as a leader in energy transition, which can contribute to Indonesia’s sustainability journey,” Pertamina’s Vice President for Corporate Communication, Fadjar Djoko Santoso, said.
With the support of Crédit Agricole Corporate and Investment Bank (CACIB) which acted as Structure Advisor during the process, the development of the Sustainable Finance Framework not only reinforces Pertamina’s commitment to sustainable business practices, but also demonstrates Pertamina’s intention to use the Sustainable Finance Framework as a reference for integrating sustainability in future funding.
