Pertamina's Sustainable Finance Framework: Powering Indonesia's Green Transition

Pertamina, Indonesia's state-owned energy company, has taken a significant step towards integrating sustainability into its financing strategy. The company has unveiled its debut Sustainable Finance Framework, which aims to enable Pertamina and its subsidiaries to access the market for financing of green and transition-related projects. This strategic move aligns with Pertamina's broader commitment to creating long-term value and sustainability for its stakeholders while making a positive impact on the environment.

Unlocking Sustainable Financing for a Greener Future

Aligning Financing with Sustainability Ambitions

Pertamina's Sustainable Finance Framework establishes the guidelines the company will follow when issuing new sustainable financing instruments, including loans and bonds. This framework is a crucial step in deepening the integration of Pertamina's sustainability ambitions into its financing strategy. By tapping into the growing demand for sustainable investments, Pertamina can unlock new sources of capital to fund its green and transition-related projects, further supporting its broader energy transition strategy.

Validating Sustainability Credentials

To ensure the credibility and transparency of its Sustainable Finance Framework, Pertamina has sought an independent opinion from ISS-Corporate, a leading provider of sustainability research and analysis. The Second Party Opinion released by ISS-Corporate in February 2024 validates the consistency of Pertamina's framework with the company's sustainability strategy and its alignment with the Green Bond Principles (GBP) and the Green Loan Principles (GLP). This external validation provides investors and lenders with confidence in the environmental impact of Pertamina's green or transition investments.

Financing a Diverse Range of Sustainable Projects

Under the Sustainable Finance Framework, Pertamina and its subsidiaries will be able to issue green or transition financing instruments to fund a wide range of eligible projects. These include renewable energy, green hydrogen, transmission and distribution networks for renewable and low-carbon gases, green buildings, clean transportation, low-carbon fuels, environmentally sustainable management of living natural resources and land use, emission reduction, and the transition in shipping. This diverse portfolio of projects demonstrates Pertamina's commitment to driving sustainable transformation across multiple sectors of the energy industry.

Robust Governance and Reporting

The implementation of Pertamina's Sustainable Finance Framework includes robust governance and reporting processes. These processes ensure transparency and visibility for investors and lenders on the positive environmental impact of Pertamina's green or transition investments. By prioritizing accountability and disclosure, Pertamina is setting a high standard for sustainable financing practices in the energy sector.

Powering Indonesia's Sustainability Journey

Pertamina's Sustainable Finance Framework is a significant milestone in the company's journey towards sustainability. As a leader in the energy transition, Pertamina's commitment to integrating sustainability into its financing strategy contributes to Indonesia's broader sustainability goals. By tapping into the growing demand for sustainable investments, Pertamina can unlock new sources of capital to fund its green and transition-related projects, further supporting its broader energy transition strategy and the country's efforts to achieve net-zero emissions by 2060 or even sooner.

Collaboration and Expertise

The development of Pertamina's Sustainable Finance Framework was supported by invaluable expertise from Crédit Agricole Corporate and Investment Bank, which served as the Structuring Advisor throughout the process. This collaboration not only reinforces Pertamina's dedication to sustainable business practices but also showcases the company's intention to leverage the framework to integrate sustainability into its future financing activities.