Updated: Jun 15, 2020
RPRE has successfully launched the first private issue of a Mini Green Bond for a solar PV and energy storage solution (ESS) at Gangga Island Resort & Spa in the northern Sulawesi region of Manado, Indonesia.
As of January 2020, this is the largest solar PV and battery project for a dive resort across the whole of Indonesia. The project was commissioned in December 2019 and has been awarded “Energy Storage Project of the Year '' by Global Solar + Energy Storage conference in Seoul, Korea.
About the Mini Green Bond
The 4-year bond has an issue size of USD300,000 and yields an IRR of 12.7%. The Mini Green Bond has a semi-annual repayment and investors are paid the principal and coupon of USD 49,000 every 6 months until Dec 2023. The absolute total return is 30.67% or a simple interest of 7.67% per annum.
The Mini Green Bond issuance was done via private placement and co-invested by a Family Office (Octava Impact Investments Pte Ltd), and an individual impact investor who prefers to remain private.
This debt investment is backed by the future cash flows of the original engineering, procurement and construction (EPC) contract between RPRE and the client. The contract is also assigned to the impact investors in case of any late or non-payment, and all incoming funds from the client are received in a separate RPRE bank account to be paid to the investors. There is also a corporate guarantee by RPRE to impact investors should the client pay late or default in their payment. To improve the bankability of the project, the project is also 100% insured against natural disasters, fire, lightning, riots, strikes, malicious damage, and civil commotions.
Use of Funds for more Positive Impact
The funds raised will help release RPRE’s working capital which was previously locked up and used to finance the project. This improvement in working capital will help RPRE develop more socially and environmentally positive impact investments so that other impact investors can also participate in. RPRE will provide regular impact reports annually on the environmental and social metrics to our impact investors; including reporting on carbon emissions avoided, improvement in environmental conditions and social benefits to the community.
Lack of Green Financing still the largest hurdle for many C&I clients
Due to the lack or inadequate credit facilities to help small to mid-sized companies, many still find the upfront capital investment the biggest challenge in the transition from dirty fossil fuel energy to clean renewable energy.
Innovative Financing to Unlock Capital Markets for Green Projects
With the launch of the mini Green Bond, it demonstrates how the impact ecosystem players can work together to overcome the challenges for the development of the green energy space. Together with impact investors, RPRE hopes that this key issuance will set the stage to attract more institutional and individual impact investors to unlock more capital for the small and mid-sized companies who do not have access to green financing.
With the shift in reliance from diesel generators to solar and batteries, the resort is able to contribute to the fight against climate change by reducing their carbon footprint. Over a period of 20 years, this project is expected to avoid carbon dioxide (CO2) emissions of up to 2,009 tons. The environmental impact metrics for carbon emissions avoidance will be monitored yearly and reported to our impact investors.
The project has also provided project-based employment opportunities to 15 local community members from the nearby village, leading to not only an increase in income but also an improvement in transferable skills that will allow better employment opportunities.
SDG17: Partnership for the Goals
This milestone mini Green Bond issuance has brought together important like-minded stakeholders in the value chain and ecosystem.
RPRE is grateful to our following partners:
Octava Impact Investments Pte Ltd and our Individual Impact Investor
Latham & Watkins LLP, for their pro bono legal advice
Lotus Hotels Owners and Management, for making this project possible!
RPRE truly believes that businesses can be a Force for Good. With this mini green bond, RPRE can lead and pave the way to unlock more impact capital and help fight the climate crisis and switch to clean renewable energy.
Green Bond Principles
The green bond was issued in alignment with the Green Bond Principles (GBP), a set of voluntary process guidelines created by the International Capital Market Association (ICMA). The GBP advocate for transparency and disclosure of the use of the funds from the bond and details the use of proceeds, process for project evaluation and selection, management of proceeds and reporting. The GBP provides stakeholders with transparency, accuracy and integrity of the information that is disclosed and reported by issuers of the green bond.
Future Impact Investment Opportunities:
RPRE has a healthy pipeline of upcoming projects in Indonesia and is keen to explore the issuance of more green bonds to finance renewable energy projects in the near future. Impact Investors who have an interest in investing in future green projects can contact RPRE at finance@RPREasia.com
You may visit the following websites to find out more.