KEPCO Issues Korea's First Green Bonds for Two Consecutive Years

5-Year Maturity, $500 Million Green Bond 'Hit'
"Lowest Ever Interest Rate Raised Among Global Dollar Bonds Issued by Domestic Banks and Companies"

[Asia Economy Reporter Moon Chaeseok] Korea Electric Power Corporation (KEPCO) announced on the 9th that it has issued a 5-year maturity green bond worth 500 million dollars (approximately 598.7 billion KRW) for the second consecutive year. Green bonds are bonds whose use of funds is restricted to eco-friendly investments such as domestic and international renewable energy projects.

According to KEPCO on the 9th, on the 8th, KEPCO issued 500 million dollars worth of 5-year maturity global green bonds for the second consecutive year, the first time in Korea.

A KEPCO official said, "In a situation where social interest in the environment and eco-friendly investments are increasing worldwide, we aim to proactively lead renewable and eco-friendly projects and contribute to national greenhouse gas reduction."

According to KEPCO, the issuance interest rate was 1.188%, which is the lowest level ever among 5-year global dollar bonds issued by domestic banks and companies.

Investment demand surged to 5.2 billion dollars, about 10 times the planned issuance amount of 500 million dollars, allowing the bonds to be issued at 1.188%, which is 0.45 percentage points lower than the initially offered rate of 1.638%.

The interest rate to be paid after conversion to Korean won through currency swaps is 0.539%. This is 0.868 percentage points lower than the 5-year maturity domestic power bond rate (as of the 8th), which is 1.407%. Thanks to this, financial costs could be reduced.

A KEPCO official explained, "This issuance served as an opportunity to confirm investors' trust in KEPCO's fundamentals despite high external uncertainties such as the global economic uncertainty caused by the recent spread of COVID-19 and the expansion of US-China conflicts, as well as investors' demands for KEPCO's energy transition and decarbonization."

KEPCO plans to use the funds raised through this green bond issuance for refinancing existing bonds, domestic and international renewable energy projects, expansion of renewable energy-related facilities, and energy efficiency projects.

Having successfully completed the first-ever consecutive 2-year issuance of green bonds in Korea, KEPCO expects to enhance its image as an eco-friendly energy company and save financial costs through lower interest rates.

This content was produced with the assistance of AI translation services.