The International Finance Corporation, the World Bank’s investment arm, has raised 2 trillion Indonesian rupiah ($131.5 million) via Komodo green bonds to help fund infrastructure and climate-related projects in Indonesia. The bonds will be the first green offshore debt denominated in rupiah sold by a multilateral development bank, the IFC said in a statement today.
“The issuance of IFC’s green Komodo bond underscores our commitment to support Indonesia in achieving environmentally sustainable economic growth.The bond allows us to mobilise 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,” said Nena Stoiljkovic, IFC Vice-President for Asia and the Pacific.
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, which will be listed on both the London Stock Exchange and the Singapore Stock Exchange, 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.
Jingdong Hua, IFC’s vice president and treasurer, said the first ever green Komodo bond issued in rupiah for climate investment in Indonesia was a significant milestone for IFC and for Indonesia to help the private sector manage foreign exchange risk through local-currency financing.
Previously, the IFC has issued green bonds in other emerging market currencies, including Indian rupee, Chinese yuan and the Philippine peso. The lender had sold 32 green bonds totalling $1.8 billion in the fiscal year ended June 2018. The IFC statement quoted John Lee Tin of JP Morgan, one of the sale’s underwriters, as saying the bonds were received “positively” by global investors.
“Given current volatility in emerging markets, the deal’s oversubscription represents a high level of success,” he said.
The bonds will be listed on stock exchanges in London and Singapore. In February, Indonesian government became the first in Asia to issue global green bonds, selling $1.25 billion in green sukuk.
Source The Hindu Business Line