Sustainable Finance

Sustainability-Linked Bond

In 2021, our subsidiary PT Japfa Tbk issued a Sustainability Linked Bond (“SLB”) to improve water circularity. Our SLB is the first of its kind for the agri-food industry globally and the first US$-denominated SLB issuance from Southeast Asia.

The SLB issuance was over 3 times oversubscribed and upsized from US$250 million to US$350 million at a lower coupon of 5.375% p.a. maturing in 2026.

The SLB was pegged to Sustainability Performance Targets (“SPT”) linked to wastewater treatment, recycling and ultimately to improve water circularity and reduce water withdrawal. PT Japfa Tbk SPT is to construct nine water recycling facilities over the next 3 years and 9 months from the date of the SLB issuance.

The SLB is an additional catalyst to achieve our sustainability targets, in particular with regard to our water conservation efforts.

Back in 2019, Japfa was the first vertically integrated poultry producer in Indonesia to formally conduct a Life Cycle Assessment (“LCA”), which identified water and wastewater management as areas of improvement. The LCA is a formal science-based assessment of the Company’s vertically integrated production cycle from feed to chicken products sold. The assessment aims to provide a better understanding of the impacts associated with Japfa’s products and identifies opportunities to improve the environmental performance of our products at various stages in their life cycle.

As a part of our water conservation efforts, we are committed to recycle water so that we can reduce freshwater or groundwater withdrawal and minimise pollution from our wastewater.

PT Japfa Tbk has been honoured with the following awards at The Asset Triple A Sustainable Capital Markets Country and Regional Awards 2021: “Best Issuer for Sustainable Finance” and “Best Sustinability-Linked Bond”.

You can find more information on the SLB and progress here:

Date	Event	Download
28 April 2022	PT Japfa Tbk Sustainability Performance Target Satisfaction Disclosure - 1st year full report	SPT Progress Disclosure
16 March 2021	PT Japfa Tbk launches first sustainability-linked bond in the agri-food industry globally and successfully places US$350 million	Japfa Ltd SLB Press Release
08 March 2021	PT Japfa Comfeed Indonesia Tbk's Sustainability-Linked Bonds	Second Party Opinion Japfa Sustainability-Linked Financing Framework

Sustainability-Linked Loan

In 2022, our subsidiary PT Japfa Tbk took another big step along its sustainability journey by securing the first Sustainability-Linked Loan (“SLL”) within the Japfa Group.

The SLL of Rp1.42 trillion (US$95 million) is a 5-year bilateral credit facility for general corporate purposes financed by PT Bank Negara Indonesia Tbk, Persero (“BNI”). We are pleased to be part of this milestone for BNI as this is their first SLL in the agri-food sector.

The SLL prioritises an environmental key performance indicator (“KPI”) linked to improve water circularity and reduce water withdrawal. The SLL has a Second Party Opinion (“SPO”) certification from Moody's ESG Solutions to be aligned with LMA/APLMA/LSTA’s Sustainability-Linked Loan Principles (“SLLP”) 2022.

The underlying basis of our sustainability-linked funding has been a Life Cycle Assessment (LCA) on our poultry operations

Sustainability-Linked Financing Framework

Japfa Ltd recognises the importance of incorporating sustainability in our day-to-day operations for our long-term success. We believe that sustainable finance not only represents an opportunity for Japfa Ltd but it will be a strong motivator in driving the change toward a sustainable future. These financing activities will also allow our investors and stakeholders to partner with Japfa Ltd in achieving long term sustainability goals.

This Sustainability-Linked Financing Framework (hereinafter referred to as the “Framework”) has been established in alignment with Japfa’s Sustainability Pillars to provide guidance on debt issuances covering the following types of sustainability-linked instruments:

Sustainability-Linked Bonds
Sustainability-Linked Loans

This Framework is applicable to Japfa Ltd and all our subsidiaries. For the avoidance of doubt, the sustainability-linked instruments can be in any currency, tenor or with other terms or conditions.

Climate Disclosure