The International Finance Corporation ( IFC ) has made its first sustainability-linked loan ( SLL ) in Indonesia, the proceeds of which will be used to expand the green building certification of the assets in the portfolio of retail and logistics property platform Nirvana Wastu Pratama ( NWP ).

In extending the SLL, the IFC invested equally, alongside Bank OCBC NISP, in a US$53 million facility with an 11-year tenure to NWP. The proceeds will support the company in decarbonizing its property portfolio by improving energy efficiency, reducing greenhouse gas ( GHG ) emissions and achieving green building certification through the IFC’s internationally-acclaimed EDGE programme.

The IFC’s partnership with NWP will deliver clear technical guidance on establishing and meeting sustainability performance targets ( SPTs ), refining its sustainability-linked finance framework to align with the IFC’s green building and investment standards.

The loan is tied to two specific SPTs. First, assets that have been in operation for more than three years need to achieve an absolute emissions reduction target of 42% by 2030 as compared with the 2019 benchmark. Second, new building projects or projects undergoing major retrofitting need to achieve EDGE ( Excellence in Design for Greater Efficiencies ) advanced certification.

NWP has been an early adopter of the EDGE green building tool and certification programme in Indonesia. Since 2017, the company has secured EDGE certifications for 11 assets, with six more registered for certification by 2027.

The building and construction sector plays a key role in Indonesia’s economic and sustainable development. However, as IFC points out, it is also a significant source of GHG emissions, accounting for 23 % of Indonesia’s energy use in 2021. This figure is expected to increase to 40% by 2030.

“The IFC’s support will not only help us to adopt greener building practices but also to set a new benchmark for the industry in Indonesia,” adds Kevin Cow, NWP CEO and president-director. “This joint effort will significantly cut GHG emissions in our projects and benefit the economic development of local communities.”