Bank DBS Indonesia has launched a USD 20 million sustainability-linked trade finance (SLTF) facility for PT. Indorama Synthetics Tbk, a spun yarns and polyester producer. The facility is tied to the company’s ESG goals, marking a significant step in integrating sustainability into trade finance.
The SLTF is the first of its kind for Indorama, a subsidiary of Singapore-based Indorama Corporation. The facility links financial terms to measurable ESG improvements, encouraging reductions in carbon emissions, energy use, and water consumption.
Key performance indicators (KPIs) associated with the facility include reduction of Scope 1 and Scope 2 greenhouse gas (GHG) emission intensity, lower energy intensity across operations, and improved water use efficiency.
In 2024, Bank DBS Indonesia and Indorama collaborated on a USD 10 million credit facility to transition from a captive coal power plant and enhance energy efficiency at Indorama’s Purwakarta factory. The SLTF builds on this earlier partnership to further support the company’s sustainability goals.
This initiative highlights the growing role of sustainable finance in supporting businesses to align with climate goals. The SLTF reflects a practical approach to integrating ESG principles into corporate operations, offering financial incentives for measurable environmental improvements.
Lim Chu Chong, President Director of PT Bank DBS Indonesia, highlighted the facility’s role in helping businesses transition to greener practices and achieve sustainability targets. Similarly, Vishnu Baldwa, Managing Director and Group Chief Financial Officer of Indorama, described the initiative as a significant step toward advancing measurable ESG goals while meeting trade finance needs.
By linking financing to sustainability KPIs, the facility demonstrates how trade finance can support ESG improvements while maintaining operational efficiency. This initiative also highlights the importance of financial innovation in achieving long-term sustainability goals within the industrial sector.
