European nations, known for their commitment to sustainability, are implicated in funding nickel mining activities, including financing for captive coal-fired power plants (PLTU). Ricko Nurmansyah, Sustainable Development Policy Research and Program Assistant at The Prakarsa, clarified that a significant portion of financial flows in the nickel industry comes from loans, bonds, and equities. Breakdown: loans constitute 66.5%, bonds 5.4%, and equities 28.1%. Financing in the nickel industry encompasses mining, smelting, and captive coal-fired power plants. Financial tracing revealed that a considerable share of capital in Indonesia's upstream nickel sector originates from China and is heavily invested in Sulawesi and Halmahera (North Maluku). Nevertheless, European financial institutions are also involved in funding these projects.Ricko mentioned European financial institutions contributing to nickel project financing in Indonesia, including HSBC, Santander, ING Bank, among others.
According to gathered data, HSBC provided the most extensive financing, amounting to USD 1.09 billion in syndicated loans for smelter construction and battery industry zones in Karawang, West Java. This included the acquisition of PT Debonair Nickel Indonesia's RKEF smelter in IWIP with a 380 MW coal-fired power plant and loans obtained by PT Merdeka Tsinghan Indonesia. Ricko highlighted a key observation: the current implementation of sustainable financial policies. He emphasized that European banks are committed to funding sustainable projects, meaning they are free from Human Rights violations and environmental impacts that could diminish environmental benefits. Ricko stressed the urgency for financial institutions in both China and Europe to review their green commitments regarding their involvement in financing the nickel industry. In conclusion, The Prakarsa underscored the importance of promoting sustainable financial and business practices for companies in the nickel industry and Financial Services Institutions (FSIs) involved in their funding streams. This aims to encourage FSIs and nickel companies to actualize and enhance fair energy transition practices within Indonesia's nickel sector.
