SK Innovation Invests 1.3 Trillion KRW in Hungarian Battery Subsidiary... Likely to Raise ESG Bonds

[Asia Economy Reporter Park So-yeon] SK Innovation is expected to continue raising funds through green financing as it expands its battery production facilities in Europe following the United States.

On the 29th, SK Innovation announced that it will invest approximately KRW 1.2674 trillion in its Hungarian subsidiary (SK Battery Hungary Kft) for a new electric vehicle battery plant in Europe. After the investment, its stake will be 100%.

SK Innovation approved this investment plan at its board meeting the day before.

It is known that SK Innovation decided to build a third plant due to the rapidly changing market situation, including explosive growth in battery demand recently.

An industry insider said, "After the board decision, construction on site will begin first, and funding is expected to be secured about six months later," adding, "There is a high possibility that the financing will be through green financing."

SK Innovation completed and is currently operating its first battery plant with an annual capacity of 7.5GWh in Komarom, Hungary, at the end of 2019. The second plant, with a capacity of 9.8GWh, is under construction and aims to start mass production from the first quarter of 2022.

The company has not yet disclosed specific details such as the site or scale of the third plant. It is reported that an announcement will be made later today after consultations with local authorities.

Since September last year, SK Innovation has been conducting preliminary work to build the third plant in Hungary.

SK Innovation is making large-scale investments by establishing Hungary as a battery production hub in Europe.

In 2019, SK Innovation was the first domestic company to raise KRW 800 billion using a 'Green Loan.' The funds at that time were used for investments in overseas electric vehicle battery plants, including Hungary, and separator production plants.

A Green Loan is a loan system restricted to environmentally friendly sectors such as electric vehicles and renewable energy. Through certification by financial institutions, the project’s eco-friendliness can be recognized, enabling financing under favorable conditions.

Earlier, SK Innovation raised about USD 1 billion through green bonds to invest in the construction of its second battery plant in the United States.

According to the third-quarter business report last year, SK Innovation has been continuing investments with approximately KRW 8 trillion allocated for domestic and overseas battery facility investments since 2018.

SK Innovation plans to increase its global electric vehicle battery production capacity to 71GWh by 2023 and to 100GWh by 2025.

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