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Pertamina Launches Sustainable Finance Framework to Support Energy Transition and Green Projects

Pertamina Launches Sustainable Finance Framework to Support Energy Transition and Green Projects

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Pertamina published its debut Sustainable Finance Framework (Framework) which deepens the integration of its sustainability ambition into its financing strategy, thereby enabling Pertamina and/or its subholdings/subsidiaries to tap the market for financing of Green and Transition related projects.

In line with Pertamina’s broader transition energy strategy, the Framework lays out the guidelines that Pertamina will follow when issuing new sustainable financing instruments not limited to loans and bonds.

This strategic move to establish the Framework aligns with its financial endeavors with broader commitment to create long-term value and sustainability for stakeholders while making positive impact. This also further reaffirms Pertamina’s commitment to realizing its target of 32% emission reduction from Business as Usual (BAU) scenario by 2030 and fully supporting the Indonesia Government’s efforts to achieve Net Zero Emissions (NZE) by 2060 or even sooner while ensuring national energy security,” said Director of Finance of Pertamina, Emma Sri Martini.

ISS-Corporate, an independent opinion provider, has released a Second Party Opinion in February 2024 which validates the consistency of the Framework with Pertamina’s sustainability strategy, as well as its alignment with the Green Bond Principles (“GBP”) published by the International Capital Market Association (ICMA) and the Green Loan Principles (“GLP”) published by the Loan Market Association (LMA).

Under the Framework, Pertamina and its subholdings/subsidiaries will be able to issue green or transition financing instruments to finance and/or refinance eligible green or transition projects in nine categories: (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) environmentally sustainable management of living natural resources and land use, (viii) emission reduction, and (ix) transition in shipping.

The implementation of the Framework also includes robust governance and reporting processes that enable transparency and visibility to investors and lenders on the positive environmental impact from Pertamina’s green or transition investments.

The existence of the Sustainable Finance Framework is expected to be one of Pertamina’s concrete steps as a leader in the energy transition, which contributes to Indonesia’s sustainability journey,” added VP Corporate Communication Pertamina, Fadjar Djoko Santoso.

Related Article: Pertamina’s First Sustainable Aviation Fuel Tender

With invaluable support from Crédit Agricole Corporate and Investment Bank serving as Structuring Advisor throughout the process, the development of this Framework not only reinforces our dedication to sustainable business practices but also displays Pertamina’s intentions to tap the Framework to integrate sustainability into future financing.

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