Bank Mandiri and AFD Hold Green Banking Seminar

Jakarta, January 16, 2014 - Bank Mandiri and Agence Francaise de Developpement (AFD) have collaborated to stage a Green Banking Seminar so as to encourage the development of an environmentally friendly banking industry. The seminar, which explored the issues involved in bank financing for renewable energy projects, was staged as part of the second round of financing cooperation worth USD 100 million between AFD and Bank Mandiri, the agreement for which was signed in November 2013.

Bank Mandiri CEO Budi Gunadi Sadikin said that the seminar was expected to heighten the awareness of bankers to the potential for financing renewable energy development projects, especially having regard to the credit cycle, risk analysis and product development.

"Renewable energy is a profitable business segment if managed professionally. It offers great potential for bank financing. This is because almost all of the actors engaged in the business require financing arrangements that are consistent with their production cycles," Budi explained.

To support these objectives, the seminar featured a number of renewable energy experts as speakers, increasing a member of the Standing Committee of the United Nations Convention on Climate Finance, Professor Ulf Moslener of Germany, and the Assistant Director of the Indonesian Financial Services Authority (OJK) Edi Setijawan.

The two experts explained that the business of financing the development of renewable energy had become a global trend and a priority in many countries. However, the potential for eco-friendly projects in Indonesia had not been fully explored. For that reason, the support of the banking sector was urgently required. They explained that many projects lacked access to financing, especially those located in remote areas or which were of a relatively small scale.

Budi G Sadikin said that the seminar was staged as part of Bank Mandiri's commitment to becoming an environmentally friendly financial institution and to continuing its support for the development of renewable energy in Indonesia.

Previously, the Bank availed of the first AFD loan facility of USD 100 million to help fund hydropower, biogas, and combined-cycle power plant projects between 2010 and 2012.

Acting AFD Country Director Andre Hue said that the seminar would afford Bank Mandiri the opportunity to harness the business potential of the renewable energy sector by utilizing the findings of AFD studies.

"Indonesia has enormous renewable energy prospects. However, the challenges in the sector are also very diverse, including limited policy and government support, and lack of investment. Bank Mandiri, as the largest bank in Indonesia, needs to improve its capacity in the sector and establish a track record as an institution that is able to take advantage of the available opportunities and to support the management of renewable energy in Indonesia efficiently and optimally," he explained.

The AFD is a French-government financial institution that enjoys an outstanding reputation internationally. It also has a high level of awareness of energy conservation and the environment. The AFD has been in Indonesia since 2005, and was previously involved in financing environmental projects, such as post-tsunami reconstruction in Aceh and marine conservation in Indonesia.


distributed by