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Project financing RDMP Pertamina Balikpapan refinery wins deal of the year award for Asia pacific

26 Feb 2024

The Project Financing Refinery Development Master Plan (RDMP) Balikpapan has been awarded the "Asia Pacific - Petchem Deal of The Year" at the 2023 Project Finance International (PFI) Awards. PFI is a publication owned by the London Stock Exchange Group (LSEG), a prestigious publication in the project finance industry globally, relied upon by professionals in the field for guidance. Project finance professionals worldwide rely on PFI deal analysis to identify opportunities and track their competitors.

The PFI Awards are a prestigious accolade for the Pertamina Group, specifically PT Kilang Pertamina Internasional and PT Kilang Pertamina Balikpapan, along with legal advisor White & Case and financial advisor Mizuho. The award was successfully achieved through the hard work and efforts of the RDMP Balikpapan Project Financing team and a strong and steady leadership of the management teams of PT KPI and PT KPB.

The "Asia Pacific - Petchem Deal of The Year" award was received by President Director of KPI, Taufik Aditiyawarman, accompanied by Finance Director of KPI, Fransetya Hasudungan Hutabarat, and President Director of PT KBP, Feri Yani, at the "PFI Awards Dinner 2023" in London, UK, on February 21, 2024.

Taufik further explained that the RDMP Balikpapan in Indonesia successfully reached a financial close in August 2023, making it one of the largest project financings in Indonesia. "The funds will be used for the refinery development and its operational capacity. In the future, it is hoped that more Pertamina refineries will become more efficient and contribute to emissions reduction – which is certainly a positive step in the government's net-zero emissions program," Taufik stated.

In completing the project financing, the RDMP Balikpapan project involved 4 Export Credit Agencies (ECA) and 22 Commercial Banks. The success in implementing project financing for the RDMP Balikpapan project, starting from a sizable project financing amounting to 3.1 billion USD, resulted in an oversubscription of up to 4.39 billion USD (142%) despite the turbulent global economy at the time, Taufik said.

Furthermore, another success in this project financing was securing a low-interest rate. "We proudly present The Biggest Project Financing involving Export Credit Agencies (ECA), valued at 3.1 billion USD or around 45 trillion Indonesian Rupiah, for energy resilience in Indonesia, contributing to reducing imports to support Indonesia's energy independence," Taufik stated.

RDMP Balikpapan is one of Indonesia's National Strategic Projects that will increase the Balikpapan refinery's capacity from approximately 260,000 barrels per day to 360,000 barrels per day, which will help meet the increased demand for domestic fuel and petrochemical products.

As of February 2024, the main progress for the ISBL - OSBL scope of the RDMP Balikpapan Project has reached 88% completion. Further, this project also emphasizes sustainability and the environment, with products meeting high-quality Euro 5 standards, which have lower sulfur content, making them more environmentally friendly.

As one of the largest investment projects in Indonesia, the Balikpapan project will reduce Indonesia's dependence on imported fuels and provide a multiplier effect for regional economic growth by involving local companies, creating local job opportunities, and targeting a domestic component level (TKDN) of 30%–35%. Additionally, the increasing fuel, LPG, and National Petrochemicals production is expected to save Indonesia's trade deficit by up to 2 billion USD per year. For more information regarding RDMP Balikpapan Project Financing can be accessed through https://www.pfie.com/featured/pfi/yearbooks.

PT Pertamina International Refinery (KPI) is a subsidiary of Pertamina engaged in the main businesses of oil refining and petrochemicals in line with ESG (Environment, Social & Governance) principles. PT KPI is also registered with the United Nations Global Compact (UNGC) and is committed to the Ten Universal Principles of the UNGC in operational strategy as part of ESG implementation. PT KPI will continue to conduct its business professionally to realize its vision of becoming a world-class oil and petrochemical refinery company with environmental awareness, social responsibility, and good corporate governance.

Vice President of Corporate Communication of Pertamina, Fadjar Djoko Santoso, stated that global investor confidence in Pertamina continues to increase in line with the company's success in maintaining financial stability as a world-class energy company conducting sustainable business.

"Pertamina has successfully maintained its Investment Grade rating of BBB with a Stable outlook from global rating agencies, such as Fitch Ratings. This confidence will drive Pertamina to enhance cooperation in managing innovative and environmentally friendly energy businesses," Fadjar said.

Pertamina, as a leading company in the energy transition, is committed to supporting the Net Zero Emission 2060 target by continuously promoting programs that directly impact the Sustainable Development Goals (SDGs) achievement. All these efforts align with Environmental, Social & Governance (ESG) implementation across all Pertamina's business lines and operations.**

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