IFC and LOGOS Partner to Develop Green Logistics Hub, Drive Economic Activity in Indonesia

Media
Monday 14th December 2020

Singapore, December 14, 2020— Indonesia will benefit from a major green investment in the logistics sector that’s set to address a critical infrastructure gap, at the same time creating jobs and supporting a recovery in Southeast Asia’s biggest economy amid the impact from the COVID-19 pandemic.

Under an agreement announced today, IFC, a member of the World Bank Group, will provide LOGOS, a leading logistics property group in the Asia Pacific region, with up to US$120 million in debt financing for the development of two logistics estates in the greater Jakarta area. This significant investment will deliver modern and high-quality logistics infrastructure in Indonesia’s rapidly growing e-commerce market while supporting business expansion and promoting competitiveness in the country’s warehousing sector.

The development of these sites is expected to generate 1,000 jobs during the construction phase along with hundreds of indirect jobs created by potential tenants, including global third-party logistic firms and large e-commerce groups.

Both estates—LOGOS Cikarang Logistics Park and LOGOS KLOG Cibitung Logistics Hub—are targeting a Green Mark award certification and are designed to comply with IFC’s green-building standards. This will include a wide range of sustainability initiatives to reduce greenhouse-gas emissions during construction and operation.

“We are very pleased to have established our first green loan with IFC and look forward to leveraging their extensive knowledge on Indonesia and green building certifications through this new partnership,” said LOGOS Managing Director Stephen Hawkins. “Sustainability is a key driver of our business and we are actively incorporating sustainable initiatives across all our projects and operations regionally. IFC’s green loan is an important part of this commitment and will support us in delivering these two modern, high-quality and sustainable logistics estates for the Indonesian market.”

Indonesia is home to an expanding middle class and rapid urbanization, both factors that are contributing to a boom in e-commerce that has the sector on track to be worth US$124 billion by 2025. Retailers and e-commerce players are, however, faced with challenges due to Indonesia’s archipelagic geography and the fragmented and nascent logistics sector. As a business enabling infrastructure, warehouses play a key role in attracting foreign direct investment from multinational companies.

“IFC’s green investment, in sync with the government’s sustainability agenda, will help address a significant lack of adequate warehousing space in Indonesia, which is critical in the wake of an e-commerce boom amid the COVID-19 pandemic,” said Alfonso Garcia Mora, IFC Vice President for Asia and Pacific. “Moreover, this project will help create thousands of jobs, supporting the development of a strong logistics sector and contributing to Indonesia’s recovery efforts, thereby promoting greater market resilience.”

With the support of local partners, IFC has been turning new construction projects (16 million square meters of floor space and over 107,000 homes) into green buildings in various cities since 2016. This has helped cut 270,000 metric tons of greenhouse-gas emissions per year, has avoided 500,000 megawatt-hours of energy use and saved almost US$80 million per year on utility bills.