Name of borrower: PLN Batam
Amount: Rp588 billion
Tenor: Unspecified
Underwriter: Maybank UUS
Date: August 2023
The Rp588 billion ($36 million) Ijarah Muntahiyah Bit Tamlik (IMBT) financing granted to PT PLN Batam, a state-owned electricity provider, is Indonesia’s Islamic finance deal of the year.
This strategic transaction supported the borrower in its transition from coal-based power to a more environmentally friendly gas-based fuel system.
Specifically, the funds were allocated for the construction of a 50-megawatt gas engine power plant in Sekupang, Batam. The project is part of the borrower’s broader initiative to decarbonize its operations.
The financing … not only supports this green transition but also represents a novel approach in PLN Batam's financial strategy
The financing, executed under the shariah-compliant IMBT scheme, not only supports this green transition but also represents a novel approach in PLN Batam's financial strategy, demonstrating a strong commitment to Islamic financing principles.
The lMBT structure is particularly suited to meet the fixed-asset procurement needs of companies such as PLN Batam, offering an alternative to traditional long-term loans.