Eximbank to expand 'green' financing
By Na Jeong-ju
Export-Import Bank of Korea Chairman Kim Yong-hwan
Export-Import Bank of Korea (Korea Eximbank) Chairman Kim Yong-hwan has vowed to boost financing for developers of renewable energy sources and environmental technologies to help the country become a global “green growth” powerhouse.
“Investing in such industries is quite risky for now, but we believe they will become a new growth engine for the Korean economy. They deserve extra care and more financial support,” Kim said in a recent interview with The Korea Times.
The state-run financier recently issued “green bonds” worth $500 million to support the development of clean energy technologies. This is the first time that a Korean lender has issued such bonds.
The money will be loaned at low interest rates to Korean firms developing alternative energy sources.
“That was a meaningful first step. We will try to find more global investors who are willing to join in our efforts to nurture such firms,” Kim said.
The project is in line with the government’s efforts to become a “fast mover” in developing core environmental technologies, which has become an urgent task for many countries as climate change is one of the greatest challenges the world faces today.
Under the “low-carbon, green growth” vision unveiled in 2008, the government has introduced economy-wide initiatives to transform the country’s system of securing resources, its practice of utilizing energy and power generation. However, jumping into the business is still a risky bet for firms.
“It’s our job to pioneer a new market and support our corporate clients,” Kim said. “In this regard, financing for clean energy projects will provide new opportunities for the firms as well as the Korean economy.”
The bank received a certificate from the Center for International Climate and Environmental Research, based in Oslo, Norway, early this year to issue the bonds. To draw interest from international investors, it held road shows for about two weeks. As a result, the lender was able to issue the bonds at a relatively low annual interest rate of 1.819 percent.
The successful issuance of green bonds reflects confidence among global investors in the prospects for Korean energy developers as well as the country’s economy despite the jitters over North Korea’s third nuclear test, bank officials said. Since the green bonds were first issued by World Bank in 2008, only international institutions, such as the European Investment Bank and Asia Development Bank, had sold them.