Bank CIMB Niaga bags win at ESGBusiness Awards 2024 for sustainability-linked financing

It has extended an IDR300b refinancing package to enable energy savings and green building certifications.

Private banking company Bank CIMB Niaga received the Energy Efficiency Retrofit Programme Award - Indonesia category win at the prestigious ESGBusiness Awards 2024 for its successful introduction of an innovative ESG financing solution with the launch of its sustainability-linked financing (SLF) specifically designed for the non-retail real estate and commercial building sectors. 

The SLF product sets sustainability performance targets in areas such as green building certifications, energy efficiency, and Scope 1 and Scope 2 carbon emission reductions. Borrowers are required to report their measures to track the strategy and achievement of these targets. Bank CIMB Niaga offers attractive interest rate discounts per annum as an incentive for meeting these sustainability goals.

One of the most recent success stories for its initiative is the deal with Nirvana Wastu Jaya Pratama, the owner and operator of The Park Mall Semarang in Indonesia. The latter has received a significant IDR300b refinancing package that incorporates SLF features and the Musyarakah Mutanaqisah Islamic structure, marking the first Islamic-compliant sustainable finance initiative by the bank.

This undertaking aims to achieve certain energy-saving targets through energy conservation measures and green building certifications until the end of financing terms.

Nirvana Wastu Jaya Pratama has seen a positive development for its financial management through the introduction of the SLF, offering a competitively priced refinancing package and enhancing the public image and reputation of the company in terms of ESG and sustainability.

The SLF deal also enhances Bank CIMB Niaga and the client's ESG reputation, expected to also support the group's business expansion going forward as a real estate and property market lead. This showcases their leadership in sustainable finance and environmental stewardship, which aligns with global sustainability standards.

Looking ahead, the bank aims to secure more deals with a diverse range of property players across Indonesia, targeting an increase in SLF for energy-efficient buildings as mainstream aspects of the bank’s non-retail real estate financing offerings are expected to continuously grow the bank portfolio over the next few years.

The ESGBusiness Awards celebrates companies that are leading the way in building a sustainable future. It also highlights businesses that demonstrate outstanding commitment and achievement in environmental, social, and governance practices.