Eximbank, ADB trust fund to guarantee Hanwha green bonds

The Export-Import Bank of Korea (Eximbank)'s logo / Korea Times file

By Yi Whan-woo

The Export-Import Bank of Korea (Eximbank) and the Credit Guarantee and Investment Facility (CGIF) will guarantee green bonds to be issued by renewable energy company Hanwha Solutions, the bank announced Friday.

Hanwha Group affiliate Hanwha Solutions will issue its first overseas green bonds worth 1 billion yuan ($153.1 million), starting Monday, as part of efforts to bolster its solar power and hydrogen businesses.

Green bonds refer to debt securities issued to invest in environmentally friendly projects.

The Eximbank, a state-run policy lender, and the CGIF, a trust fund of the Asian Development Bank (ADB), will each guarantee 50 percent of the yuan-dominated bonds issued by Hanwha, with a three-year maturity and an interest rate of 3 percent.

When converted into the Korean currency, the bonds will offer an annual interest rate of approximately 0.7 percent. The bonds received an AA rating from Standard & Poor's.

The Eximbank and the CGIF offered credit guarantees for 70 million Singapore dollars ($52.4 million) worth of bonds issued by CJ Group affiliate CJ Logistics in 2019.

“We will continue to capitalize on our global network, including the CGIF, to offer a range of financial support for Korean companies in solar, wind and other renewable energy businesses,” the policy bank said.

It noted that cooperation with the CGIF was “worth other Korean enterprises taking into account” if they were considering raising funds by issuing bonds in Asia.

The government has a 14.3 percent stake in the CGIF through the Eximbank.

Hanwha Solutions is Korea's No. 1 solar power company.

The CGIF was established in 2010 by ASEAN Plus Three, the group of 10 ASEAN member states, and Korea, China and Japan, and the ADB.