Green bond: Transjakarta explores green bond
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Bisnis Indonesia - Obligasi hijau: Transjakarta jajaki green bond
14 May 2022
By: Faustina Prima Martha and Kadijah Shahnaz
Bisnis, Jakarta – PT Transportasi Jakarta or Transjakarta is exploring an opportunity to issue green bonds on the London Stock Exchange to support the company’s expansion plan to procure 100 units of electric buses until 2030.
To realise the plan, PT Transportasi Jakarta’s President Director M. Yana Aditya and Operations and Safety Director Yoga Adiwinarto visited the London Stock Exchange on Thursday (12/5).
“During the meeting, we explored the possibility to issue global bonds. We had a chance to discuss Transjakarta’s plan to develop electric buses and sustainable transportation in Jakarta. To support [the plan], we need support in the form of financing,” Yana said in his official statement on Friday (13/5).
Yana added that the development of electric buses and sustainable transportation in Jakarta was in line with London Stock Exchange’s green bond concept that focuses on environmental protection.
Moreover, electric buses are predicted to reduce pollution by up to 28% compared to diesel buses. Besides that, CO2 emission from an electric bus is 50.3% lower than diesel bus’.
“Transjakarta started operating electric buses last March. We are targeting 100 electric buses to serve the people in 2030. We hope to cooperate with the London Stock Exchange to reduce carbon emissions, especially in the public transportation sector,” he stated.
Besides strengthening the electrification of electric buses, during his work visit to London, Yana also discussed the development of the cooperation with UK PACT, in accordance with the International Climate Finance (ICF).
The cooperation that has been going on for one year will focus on the electrification of electric buses as an effort to achieve the Nationally Determined Contribution (NDC).
“This project is the continuity of the first project where UK PACT, through ITDP, will provide technical support for Transjakarta to develop a healthy final business case (FBC). So, electric buses can serve more people immediately,” he stated.
On Friday (13/5), Transjakarta also established a cooperation with Switch Mobility Ltd. Both collaborations are marked with the signing of a memorandum of understanding (MoU) in London.
The cooperation with Switch Mobility is ensured with an MoU that is signed by Transjakarta President Director M. Yana Aditya and Switch mobility Ltd Chief Planning Officer Sarwant Singht, witnessed by Jakarta Governor Anies Baswedan.
PT Transjakarta Corporate Communication and CSR Department Head Iwan Samariansyah said that Transjakarta established a cooperation with both English corporations as a follow-up to the commitment of the government of England to support Indonesia to use battery electric vehicles.
“We also went to London to follow up,” Iwan said to Bisnis.
BNI’s green bonds
In other developments, PT Bank Negara Indonesia (Persero) Tbk (BBNI) is strengthening their commitment in the green banking segment by offering green bonds worth Rp5 trillion.
The debt securities are offered in 3 series, namely series A with a tenure period of 3 years, series B with a tenure period of 5 years, and series C with a tenure period of 7 years.
As the green banking pioneer, BNI is the first national bank to issue green bonds in rupiah. Next, the collected funds will be used to finance and refinance green projects.
Moreover, green projects are projects that are related to renewable energy, energy efficiency, waste to energy processing, waste management, natural resource utilisation, sustainable land use, land and water biodiversity conservation, sustainable water and wastewater management, climate change adaptation, green buildings, as well as sustainable agriculture.
Besides that, BNI has arranged a green bond framework that includes regulations on the project selection mechanism, the use of funds, as well as the reporting mechanism from the green bond issuance.
BNI Vice President Director Adi Sulistyowati said that green banking was one of the company’s strategic categories. Besides its benefits for the long-term stability and sustainability of the economy, BNI has many customers, debtors, and partners who can be asked to support the realisation of green economy in Indonesia.
“Green economy is one of BNI’s long-term commitment. We will use the green bond issuance to finance and refinance green projects, in accordance with the direction from the government and the authority,” Adi Sulistyowati, who is familiarly called Susi, said in her written statement on Wednesday (11/5).
On a different occasion, Centre of Economic and Law Studies (Celios) Bhima Yudhistira assessed that green bonds were currently quite interesting, especially for institutional investors.
He said that the advantage of green bonds was the lower credit risk compared to conventional bonds.
“With the environmental risk that can be mitigated, then green bond issuers can receive better perception than their peers,” Bhima said on Wednesday (11/5).
Besides that, he continued that it could also improve the image of the company and investors.
Bhima said that investors were increasingly focusing on issues related to environmental, social, and governance (ESG) factors prior to purchasing financial assets.
“Green bonds that are increasingly dominant in the financing portfolio will improve the trust of investors,” Bhima said.
