Pertamina and NEXI Enhance Agreement to Boost Trade Insurance and Credit Facility for Energy Transition
Jakarta, August 23, 2024 – PT Pertamina (Persero) of Indonesia and Nippon Export and Investment Insurance (NEXI) of Japan have reaffirmed their collaborative efforts by signing an amendment to their Memorandum of Understanding (MoU) concerning cooperation in the field of trade insurance and credit facility. This significant MoU amendment was signed during the Asia Zero Emission Community (AZEC) Ministerial Meeting 2024 held at the St. Regis Jakarta. The agreement was signed by Emma Sri Martini, Director of Finance of PERTAMINA and Kazuki Hondo, Senior Managing Executive Officer, Member of Board of NEXI.
The original MoU, which was signed at the AZEC Ministerial Meeting 2023, set the foundation for a strategic partnership aimed at supporting and encouraging trade and investment between Indonesia and Japan, assisting in energy transition and security, and enhancing cooperation in Pertamina’s financing needs. The MoU amendment is aimed to refine the scope of the MoU to emphasize the parties' commitment to strengthening cooperation in the field of export credit guarantee and insurance, and to extend the period of the MoU.
Emma Sri Martini highlighted the importance of the amendment, stating, "Exploring the benefits of loan insurance is crucial for reducing funding risks associated with our large-scale energy projects. The integration of NEXI's trade insurance and credit facilities provides a safeguard that enhances our ability to secure financing at more favourable terms. This strategic move not only mitigates potential financial risks but also reinforces investor confidence, paving the way for increased investments in our energy transition initiatives. Our collaboration with NEXI exemplifies our proactive approach to ensuring the financial robustness of our projects while advancing towards a sustainable energy future.”
Fadjar Djoko Santoso as the Vice President Corporate Communication of PERTAMINA also emphasized the mutual benefits of the collaboration by saying that the amendment to our MoU with NEXI signifies our commitment in achieving energy security, affordability, and sustainability to support Indonesia's energy transition goals and to ensure the long-term sustainability of our projects. Therefore, collaborating with NEXI is an essential effort to overcome current financing constraints and support our commitment in accelerating towards a sustainable energy transition.
Kazuki Hondo supports the initiative by stating, "This amendment marks a pivotal step in our partnership with Pertamina. By refining the scope of our MoU, we are better positioned to address the evolving challenges and opportunities in the energy sector. This collaboration will not only support energy transition initiatives but also create significant business opportunities for both Indonesian and Japanese companies.”
In leveraging Pertamina's extensive project track record and its bilateral relations with Japan, NEXI's trade insurance and credit facilities are anticipated to play a crucial role in enhancing investment landscape in energy transition. The integration of these financial tools is expected to facilitate increased investment and advancement in the sector, reflecting a concerted effort to foster a more sustainable energy future. This strategic alignment furthers the overall objectives of the Asia Zero Emission Community and the global shift towards sustainable energy systems.
Furthermore, as a significant move to bolster geothermal energy development, Pertamina Geothermal Energy (PGE), has signed an MOU with NEXI during the same event. The MOU, signed by President Director of PGE, Julfi Hadi and Senior Managing Executive Officer of NEXI, Kazuki Hondo, aims to enhance collaboration in the geothermal sector, reflecting both companies' commitment to sustainable energy solutions.**