Not Just Lending: How Banks Are Financing Green Business in New Ways

The large business opportunities from the sustainability agenda have not automatically made it easy for green projects to obtain capital. Project readiness, risk profiles, cash flow certainty, and the complexity of financing structures are determining factors in whether sustainable transition opportunities can be realised.

This condition is driving a change in the role of banking. Bank DBS Indonesia believes banks are no longer sufficient as mere capital providers. Banks also need to help companies prepare projects, determine financing structures, and find solutions that bring together sustainability targets with commercial feasibility.

These findings emerged in research by Bank DBS Indonesia together with Tenggara Strategics titled The Sustainability Shift: Indonesia’s Industrial Landscape in Five Key Sectors, Opportunities and Risks. The research examines five strategic sectors in Indonesia: energy-infrastructure, technology-media-telecommunications, food-agribusiness, health-pharmaceuticals, and metals-mining.

Director of Institutional Banking Group PT Bank DBS Indonesia, Anthonius Sehonamin, said the shift towards sustainable business requires a different approach in each sector.

“However, the shift towards more sustainable business does not have a single path in every sector. Through this research, Bank DBS Indonesia seeks to provide more targeted insight into the changes occurring in various strategic sectors,” Anthonius said on Thursday (20/8/2026).

DBS emphasised that sustainability opportunities must become projects with technical and financial readiness. Therefore, financing instruments need to be adjusted to sector characteristics and risks.

DBS provides a number of financing instruments, ranging from sustainability financing, sustainability-linked financing, structured and blended finance, business lending, trade finance, to supply chain financing. These instruments are complemented by advisory services to help companies carry out business transformation.

In the energy and infrastructure sector, electrification needs open up great opportunities while requiring massive investment. Indonesia’s electricity consumption is projected to surge from around 300 TWh in 2024 to more than 1,800 TWh in 2060. Meanwhile, Indonesia’s renewable energy potential reaches around 3,687 gigawatts (GW), but its utilisation is still below 0.5 percent. Transmission barriers and project bankability are issues that must be resolved.

DBS Indonesia claims to have supported renewable energy project financing, including geothermal, as well as green financing for the electrification ecosystem of two-wheeled electric vehicles and battery swap infrastructure.

In the technology sector, the development of AI is changing the investment needs map. Connectivity-based telecommunications growth is slowing, but the digital economy continues to accelerate. Indonesia’s total digital economy Gross Merchandise Value (GMV) is estimated to reach 99 billion US dollars in 2025. This change is driving demand for cloud, cybersecurity, and data centres.

Chairman of the Indonesia Data Center Provider Organization (IDPRO), Hendra Suryakusuma, believes data centres have the potential to become a new growth engine.

“The momentum of AI growth makes data centres a new growth engine for Indonesia’s digital ecosystem. However, the availability of renewable energy and future policy certainty will be just as important as the size of the market potential in determining investment decisions,” Hendra said.

DBS Indonesia noted one of its supports through a green loan facility worth Rp1.7 trillion for Princeton Digital Group (PDG). DBS acted as Joint Mandated Lead Arranger and Green Loan Coordinator in the construction of Indonesia’s first hyperscale data centre powered by renewable energy to achieve BCA-IMDA Green Mark Platinum certification.

In the food and agribusiness sector, financing is focused on strengthening the supply chain. DBS supports the sustainable coffee supply chain through a pre-export facility worth 20 million US dollars for Sucden Coffee Indonesia. The bank also supports Adena Coffee through DBS Indonesia’s first blended finance scheme together with the DBS Foundation, which has reached more than 2,000 smallholder farmers.

In the mining sector, sustainability demands are increasingly linked to global market access. Indonesia controls around 60 percent of the world’s nickel production. However, around 97 percent of electricity for processing nickel still comes from captive coal power. This condition is a challenge amid increasingly stringent global trade standards on carbon footprint.

Director and Chief Sustainability and Corporate Affairs Officer of PT Vale Indonesia Tbk, Budiawansyah, said reducing carbon intensity could be a differentiator for Indonesian nickel products. “As market attention to carbon performance increases, nickel products with lower carbon intensity have the potential to have value differentiation in the global market,” he said.

DBS Indonesia noted its support through a sustainability-linked loan worth Rp13.5 trillion for Vale Indonesia, with DBS acting as facility agent. This facility is linked to targets for reducing carbon emission intensity and increasing renewable energy use.

In the health sector, financing and innovation support are focused on strengthening the supply chain and access to services. Around 90 percent of Indonesia’s active pharmaceutical ingredients (API) are still imported, with main suppliers from China and India. The DBS Foundation also supports DoctorTool, a healthtech company developing integrated digital medical records with BPJS and SATUSEHAT to expand access to primary healthcare services in underserved areas.

DBS’s advisory role is also evident through its assistance to PT TBS Energi Utama Tbk in formulating a Climate Transition Plan towards carbon neutrality by 2030. This transformation includes capital reallocation to waste management, renewable energy, and electric mobility.

DBS research concludes that the sustainability transition requires interconnection between financing, business strategy, and ecosystem development. Business actors are encouraged to move up the value chain, strengthen innovation, and build cross-sector collaboration so that Indonesia’s sustainability opportunities can be realised into competitive advantages.