SK E&S Raised a Fund of $300 million through A Green Loan (Green Financing), Facilitating its ESG-driven Management
- SK E&S signed a green loan agreement with Korea Development Bank, Export-Import Bank and NH Nonghyup Bank to provide resources for investments in its hydrogen business
- Green loans are available exclusively to green business and are becoming a global financing trend among global companies and financial institutions |
SK E&S has been expanding its business into green energy for the future such as hydrogen and renewable energy and is accelerating its new business for growth by recently obtaining a green loan (green financing) successfully.
On March 4, SK E&S announced that it signed a green loan agreement with a “Council of Joint Support for Overseas M&A (Council)” consisting of Korea Development Bank, Export-Import Bank and NH Nonghyup Bank to raise a fund of $300 million. The fund from the green loan will be used to expand the company’s hydrogen business including an equity investment in Plug Power in the U.S.
Green loans are a type of loans made available exclusively to finance green business such as renewable energy, energy efficiency or hydrogen infrastructure. Given their nature, it is difficult for a company to obtain a green loan after going through financial institutions’ meticulous approval process and it is necessary to manage the fund thoroughly. But, they are considered to be worth in the long run in that they can contribute to solving environmental issues, which makes obtaining a green loan a global financing trend among global energy companies and financial institutions.
Last January, SK E&S and SK became the largest shareholder (with 10% of stakes) of Plug Power in the U.S., one of the leading global hydrogen technology providers in the world, by investing a total of 1.85 trillion won ($1.6 billion) in the company. The green loan agreement will enable SK E&S to finance $300 million (about 330 billion won) in time and provide adequate resources for investment in Plug Power.
An official of Korean Development Bank said, “Council of Joint Support for Overseas M&A only provides green financing for green industries considered critical at the national level.” He added, “The council plans on encouraging Korean companies to make green investments and commits itself to the government’s Low Greenhouse Emission Development Strategies”.
An SK E&S official said, “Obtaining a green loan from major state-run banks means the core business of SK E&S is recognized as green business for future potential growth. We will continue to be committed to becoming a global major green energy enterprise that leads ESG efforts by focusing our business portfolio on hydrogen and renewable energy.”