Second-Party Opinion Download

Sustainalytics is of the opinion that the Pertamina Geothermal Energy Green Financing Framework is credible and impactful and aligns with the four core components of the Green Bond Principles 2021, Green Loan Principles 2021 and ASEAN Green Bond Standards 2018. This assessment is based on the following: 

USE OF PROCEEDS

The eligible category for the use of proceeds, Renewable Energy, is aligned with those recognized by the Green Bond Principles, Green Loan Principles, and ASEAN Green Bond Standards. Sustainalytics considers that investments in the eligible category are expected to support the clean energy transition in Indonesia and advance the UN Sustainable Development Goals, specifically SDG 7 and 9.  

PROJECT EVALUATION / SELECTION

PGE has established the Green Finance Committee (GFC), which comprises of senior representatives from several departments to oversee the project evaluation and selection process. PGE has processes in place to identify and mitigate common environmental and social risks associated with the eligible projects, which are applicable to all allocation decisions made under the Framework. Sustainalytics considers these risk management systems to be adequate and the project selection process to be in line with market practice. 

MANAGEMENT OF PROCEEDS

PGE’s treasury department will oversee the management of proceeds. The allocation process will be tracked using a green financing transactions register. PGE intends to fully allocate net proceeds within 24 months following the date of receipt and unallocated proceeds will be temporarily held in cash or cash equivalents. This is in line with market practice.

REPORTING

PGE intends to report on the allocation and impact of eligible projects on an annual basis until full allocation via a publicly available report on its website. Allocation reporting may include the list and description of eligible expenditures with their respective allocated amounts, the share of financing versus refinancing and balance of unallocated proceeds. Impact reporting may include environmental impact indicators and project examples where feasible. Sustainalytics views the allocation and impact reporting as aligned with market practice.