Bank Shinhan Indonesia secures $200m funding from IFC

South Korea's Shinhan Bank said Friday its Indonesian unit, Bank Shinhan Indonesia, has won a $200 million investment from the International Finance Corp.

The funding is a result of a memorandum of understanding signed between Shinhan Financial Group and the IFC in May, aiming to expand cooperation in global expansion and environmental, social and governance drives.

Initially, the IFC will provide $100 million, followed by an additional $100 million financing within a year.

Bank Shinhan Indonesia plans to allocate 15 percent of the fund to support Indonesian businesses involved in ocean and water resources, 40 percent for new energy and energy efficiency projects and 20 percent for small and medium-sized enterprises, contributing to the Indonesian government's commitment to achieve carbon neutrality.

The remaining 25 percent will be utilized to fund all three sectors.

"The investment is significant as we have secured the foundation for long-term growth in Indonesia, where dollar-based financing is difficult to achieve," Bank Shinhan Indonesia President Director Koo Hyung-hoe said. "We will continue to collaborate with the IFC to strengthen ESG finance."

Bank Shinhan Indonesia began its official operation in the Southeast Asian country in 2017, following a merger with Indonesia's Centratama Nasional Bank.