Jakarta. DBS Bank, the largest lender in Southeast Asia by market capitalization, has made a bet in Indonesia's electronic vehicle battery initiative, marking growing confidence in the country's ambition to use the industry for transforming its economy. 

The lender announced on Thursday that it has jointly led a consortium of nine banks that provide $625 million in project financing to Halmahera Persada Lygend, Indonesia’s first high-pressure acid leach (HPAL) smelter that produces nickel compounds for electric car battery manufacturing. 

Tan Su Shan, DBS's group head of institutional banking and president commissioner for the lender local arm, Bank DBS Indonesia, said the financing would forge ahead Indonesia’s electric vehicle and battery manufacturing industry.

“With Indonesia holding the largest share of the world’s nickel reserves, we’re excited to support the country’s plans to develop a global EV supply chain onshore by helping to advance companies in high growth industries like [Halmahera Persada] that are also mindful of their ESG impact,” Tan said. 

Halmahera Persada, part of the Lim family's Harita Group, was the first company in Indonesia to use the HPAL, a proven but expensive technology able to extract nickel compounds from nickel limonite, a kind of ore with a lower concentration of the metal.

The smelter has a capacity to process 8.3 million metric tons of nickel ores per year to produce 365,000 metric tons of mixed nickel-cobalt hydroxide precipitate (MHP) and its derivative products, namely nickel sulfate (246,750 tons) and cobalt sulfate (31,800 tons), according to Harita Group website.   

DBS said electric vehicle sales could go up by 42 percent to 4.4 million units this year as demand would continue to grow among environmentally conscious consumers. The trend would push demand for storage and battery metals, DBS said in the statement. 

“DBS’ strong grasp of the project, commodity markets, and battery technology, were critical in jointly leading the diverse group of banks with varying levels of familiarity with smelting and battery technologies, to ultimately deliver the customized financing solution for [Halmahera Persada],” Tan said. 

DBS has committed 50 billion Singapore dollars ($37.2 billion) to finance renewable, clean energy, and green projects by 2024, more than double the lender's earlier target of 20 billion Singapore dollars. Last year, DBS closed 9.6 billion in sustainable financing transactions, up 81 percent from the previous year.