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ESG Investing / Treasury & Capital Markets
PT SMI inks offshore sustainability-linked loan
US$700 million proceeds to finance Indonesian infrastructure, help firm meet ESG goals
The Asset 14 Sep 2023

Indonesian state-owned firm PT Sarana Multi Infrastruktur (PT SMI), which specializes in infrastructure financing, has obtained its first-ever sustainability-linked syndicated term loan facility of 10.65 trillion rupiah (US$700 million) from a number of banking partners across geographies, including Indonesia, Singapore, Japan, Hong Kong, Taiwan and South Korea.

With a target size of US$700 million, the strong market liquidity resulted in an oversubscription with aggregate commitments at around US$1.8 billion. This syndicated loan is intended to refinance existing projects as well as to fulfil new financing needs primarily for sustainable infrastructure projects in Indonesia, which will further strengthen the asset liability management of the company.

The loan features concrete performance targets that are in line with the company’s commitment to environmental, social and governance (ESG) investing and includes key performance indicators (KPIs) that grow the sustainability financing portfolio and increase the number of employees undertaking ESG-related training.

The company has raised funds from various sources, among them, capital markets, banks, and multilateral or development finance institutions.

The transaction was supported by several mandated lead arrangers and bookrunners (MLABs), namely Bank of China (Hong Kong), CTBC Bank, DBS Bank, Mizuho Bank, MUFG Bank and United Overseas Bank (UOB). UOB also acted as the MLABs’ coordinator and the overall sustainability coordinator for this transaction.

The company engaged Environmental Resources Management as the second-party opinion provider, which provided a review on the KPIs and sustainability performance targets for the transaction.

Edwin Syahruzad, the company’s president-director, says that the facility is an example of innovative fundraising and it allows the company to implement its commitment towards its sustainability target.

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