Jakarta. Vale Indonesia (IDX: INCO) secured a $750 million (Rp 12.96 trillion) sustainability-linked loan, with an option to increase the facility by a further $250 million, in a deal that drew strong demand from global lenders as nickel producers position for the energy transition.

The syndicated facility, Vale Indonesia’s first sustainability-linked loan, was oversubscribed by 1.7 times and backed by a consortium of 14 international banks, indicating investor appetite for companies tied to electric-vehicle supply chains and lower-carbon mining.

Chief Executive Officer Bernardus Irmanto said the facility reflects the company’s push to embed sustainability into strategic decision-making. “This marks an important step in aligning our financing strategy with decarbonization goals and long-term growth,” he said in Jakarta on Friday.

The financing will boost the company’s balance sheet while funding expansion projects and aligning operations with global sustainability standards, the Jakarta-listed unit of Vale S.A. said in a statement Friday.

Nickel demand is surging as a key component in EV batteries and energy storage systems. The International Energy Agency estimates global battery storage capacity will need to expand 14-fold by 2030, while EV battery demand may increase sevenfold over the same period.

Vale Indonesia is positioning itself as a relatively low-carbon nickel producer, supported by renewable energy from three hydropower plants integrated into its operations. The company is also upgrading its hydropower infrastructure to support gradual electrification.

The loan is structured under a sustainability-linked financing framework tied to key performance indicators, including reductions in carbon-emissions intensity and increased use of renewable energy. The targets received a “strong” assessment from an independent second-party opinion, indicating alignment with the Paris Agreement’s 1.5°C pathway and Indonesia’s nationally determined contribution targets.

Proceeds will be directed toward strategic projects, with about 50% allocated in 2026 to the Indonesia Growth Project (IGP) Pomalaa, 30% to IGP Morowali, and 20% to IGP Sorowako Limonite. Funding in 2027 will continue to support these developments and joint venture participation rights.

Bankers involved in the deal said sustainability-linked financing is gaining traction as industries adapt to climate targets. Representatives from DBS Bank, Mizuho Bank, and United Overseas Bank highlighted the mining sector’s role in enabling a responsible energy transition.

Strong participation despite market volatility signals confidence in Vale Indonesia’s business model and its integration of environmental, social, and governance metrics into funding structures.