International Finance Corporation (IFC), a member of the World Bank Group, has issued its inaugural Rupiah Komodo green bond for climate investments, attracting strong investor demand and raising Rp2 trillion (US$137 million) to combat climate change.
This is the first such green Komodo offshore Rupiah-denominated issuance by a multilateral development bank for investment into climate projects in Indonesia. The strong interest from a diverse group of international investors is testament to the growing appetite for socially responsible investment 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, PT Bank OCBC NISP Tbk (IDX: NISP). The proceeds will finance underlying infrastructure and climate-related projects, in accordance with Green Bond Principles.
“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 mobilize 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’s Vice President for Asia and the Pacific in a written statement.
John Lee Tin, Head of SSA DCM, J.P. Morgan said: “Investors reacted positively to IFC’s debut Komodo green bond transaction, with the eurobond issue attracting more demand than originally intended. Given current volatility in emerging markets, the deal’s oversubscription represents a high level of success.”
Henrik Raber, Global Head, Credit Markets, Standard Chartered Bank adde, Standard Chartered is committed to the development of more carbon-efficient financing solutions. He continued, the strong investor response to IFC’s transaction highlights the increasing focus and importance the global investor community is placing on supporting sustainable financing solutions to help tackle climate change.
Since launching the Green Bond Program, IFC has raised billions of dollars for clean energy, climate-smart cities, green buildings and green finance. So far, IFC issued 32 green bonds totaling $1.8 billion in the fiscal year that ended June 30, 2018.
The number of projects supported by IFC’s Green Bond Program has surged to 52 projects in FY18, from 32 projects in FY17. The portfolio is anticipated to reduce greenhouse gas emissions annually by 6.3 million metric tons of carbon-dioxide equivalent—an increase from 2.2 million metric tons in FY17.
At the close of FY18, IFC green bonds had supported cumulatively 177 investment projects.
IFC issued its first green bond in 2010 and as of end FY18 has issued a total of $7.6 billion across 111 green bonds in 13 currencies and helped client banks in the Philippines, Indonesia, and other countries do the same.
IFC Green Komodo Bond Terms and Conditions
Issuer: IFC (International Finance Corporation)
Rating: S&P AAA (stable)/Moody’s: Aaa (stable)
Settlement date: October 9th, 2018
Maturity date: October 9th, 2023 (5yr)
Size: RP2 trillion
Re-offer Price:100 percent
Re-offer Yield: 8.00 percent s/a
FX Settle: Coupon/Principal settled USD at applicable FX
FX Fixing Date: T+1 from Pricing date (October 1st, 2018)
Governing Law: New York
Denomination: Ro100 million
Listing: London Stock Exchange/Singapore Exchange
Underwriters: Bank of America Merrill Lynch/J.P. Morgan/Standard Chartered Bank