NH Securities under fire for disregarding anti-coal pledge

NH Investment & Securities CEO Chung Young-chae. Korea Times file

By Lee Kyung-min

A coalition of environmental advocacy groups is blasting NH Investment & Securities for refusing to withdraw from a financing plan to build Samcheok Blue Power, a coal-powered plant whose construction has been suspended for eight months due to a failure to meet related requirements following an environmental impact assessment.

This according to the environmentalists is a “flagrant disregard” of the anti-coal initiative pledged by the securities firm's holding company, NH Financial Group, in February.

The coalition, Korea Beyond Coal, held a press conference in front of NH Investment & Securities' headquarters in Yeouido, Wednesday, criticizing the firm's plan to issue corporate bonds to finance up to 800 billion won ($706 million) in construction costs.

The plant in Gangwon Province is Korea's last coal-powered plant in the making, a joint project being pursued by POSCO Energy, POSCO E&C and Doosan Heavy Industries.

Construction began in 2018, but was suspended last October due to the lack of coastal erosion reduction facilities, a concern which the coalition says will lead to "grave environmental damage."

“NH Investment & Securities declared it will renounce coal-powered business plans in February, saying it would forgo lending and bond investments to build new coal power plants. This was abandoned in just four months,” said one of the groups, Solutions for Our Climate, in a statement.

The group says that financing the plant is a high-risk decision. “All three domestic credit rating agencies recently lowered the credit rating outlook to negative from stable. The credit rating of the plant's corporate bonds is expected to fall,” it said.

Nearly nine in 10 asset managers already distanced themselves from buying the plant's corporate bonds.

A survey conducted by the group last December showed 88.6 percent of asset management firms said they will not take part in the sale of the plant's corporate bonds.

Ha Tae-kyung, a protestor representing a group of the province's residents opposed to the construction of the plant, called for immediate withdrawal of the plan.

"The beach is being damaged due to coastal erosion, and POSCO is threatening residents through people hired by local construction companies. If the power plant is built, it will leave much greater pain in the lives of local residents in the future. POSCO should stop threatening residents and the construction should stop immediately.”

NH securities maintains that it must sell the corporate bonds issued by the plant, due to previous contracts signed years before the anti-coal campaign gained traction.

“The purchase of corporate bonds was agreed in 2018. Other than this, we will abide by ESG goals,” an NH Securities official said.