Jakarta. Bank KB Bukopin has reached an agreement to receive $300 million or Rp 4.4 trillion worth of social bonds issued by the International Finance Corporation (IFC) to finance projects aimed at easing the social and economic impacts of the Covid-19 pandemic and other social projects.

The social bonds will be disbursed in two phases, with the first $240 million to be channeled to KB Kookmin Bank Co Ltd (KBHQ) before it goes to KB Bukopin, the company said in a statement on Tuesday.

The second phase of $60 million will go directly to KB Bukopin.

The social bond agreement was signed in late May and the IFC agreed on phased disbursements until late September.

"Bank KB Bukopin has signed a deal with IFC on $300 million or equivalent to Rp 4.41 trillion worth of social bonds. This is the first-ever agreement between IFC and a private bank in Indonesia,” KB Bukopin President Director Woo Yeul Lee said. 

“The awarded opportunity reflects KB Bukopin’s unique position that differs itself from other banks," he added.

The social bonds deal is in line with the government’s push for sustainable finance, one of the priority financial issues Indonesia is taking seriously during its G20 presidency.

KB Bukopin will use the loan to expand credits and finance projects with positive social outcomes to ease the impact of the Covid-19 pandemic. Credits taken from the social bond will be directed to three main sectors: retails, small and medium enterprises, and commercial.

Priority projects from the three sectors include affordable housing, healthcare, education, clean water infrastructure, undersea fiber optic production, and telecommunication.