Indonesian Steelmaker Secures US$32 Million Sustainability-Linked Loan

PT Gunung Raja Paksi (GRP), a member of Gunung Steel Group and one of the largest private steelmakers in Indonesia, has secured a USD 32 million sustainability-linked loan from the national bank of Indonesia, Bank Negara Indonesia (BNI), making them the first steelmaker within the country to do so.

The five-year bilateral credit would be used to fund GRP’s sustainability initiatives, which include the recently commissioned Light Section Mill (LSM).

Key to one of GRP’s commitments which is to meet domestic steel needs within the country, the LSM is expected to increase operational efficiency through lowering energy consumption and thereby reducing carbon emissions.

This project is also part of GRP’s mission towards decarbonisation which follows their recent partnership with the Indonesian Chamber of Commerce (KADIN), where the company pledged its support towards helping Indonesia achieve its goal of Net Zero by 2060.

As steel is an essential material needed in construction and industrial projects, GRP believes that the usage of steel produced via sustainable means will be an important pathway toward building an eco-friendly nation.

A recent projection by PwC and the Indonesian Iron & Steel Industry Association (IISIA) revealed that steel usage in Indonesia has reached 18.1 million tonnes (mt), an increase of 7.6% versus 2021. The same study also projects that the forecast for steel consumption by 2050 is 125 million tonnes, which is driven mostly by the construction sector which by itself accounts for up to 75% of steel demand.

Sheren Omega, Head of Sustainability at GRP said: “As one of the leaders in the private steelmaking space within Indonesia, we are conscious of the need to produce steel in a sustainable manner. Combined with this growing discernment around ESG strategies, customers and regulators are becoming more aware and educated on the need for sustainable steel.”

“The combination of this newly secured loan and our existing ESG strategy, is aimed at ensuring that the produced steel meets green requirements towards regional development projects for Indonesia’s goals to become a greener nation.”

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