Chairman Lee Dong-geol Emphasizes Green Finance at Founding Anniversary Ceremony... KDB Launches Carbon Spread

Operating Scale of 5 Trillion Won, Launch of Carbon Spread Product with Maximum Interest Rate Benefit of 1%
Expected to Serve as a Catalyst for Achieving the '2050 Carbon Neutrality Goal'

[Image source=Yonhap News]

[Asia Economy Reporter Park Sun-mi] Lee Dong-geol, Chairman of KDB Industrial Bank, stated on the 1st, "The liquidity abundant due to quantitative easing is not flowing into productive sectors," and emphasized, "KDB must take the lead in opening new avenues to foster future industries, with green finance as the starting point."

Chairman Lee made these remarks at the KDB's 67th anniversary ceremony held at the headquarters, highlighting the importance of green finance. On the same day, KDB also introduced the 'KDB Carbon Spread' product, with an operating scale of 5 trillion KRW, a maximum interest rate discount of 1%, and a maximum maturity of 10 years.

At the ceremony, which was broadcast live with only a small number of executives attending, Chairman Lee said, "For the success of green finance, policy finance should be promoted in a way that grants practical benefits to companies pursuing carbon reduction while establishing objective criteria to evaluate reduction effects and transition risks, thereby encouraging participation from both public and private sectors."

He also announced plans to focus on nurturing experts with insights into industry, finance, and policy through the segmentation of educational programs to activate support for new industries such as green sectors. Additionally, he mentioned the importance of communication tailored to young people to make KDB more youthful.

Chairman Lee urged, “Let KDB be the sunshine of the southern land and the pillar supporting the real economy so that our capable companies can savor the final sweetness of completion.”

Meanwhile, the KDB Carbon Spread product launched that day is a special product operated under exceptional conditions to support South Korea's 2050 carbon neutrality goal and the 'low-carbon transition in the industrial sector.' It will be operated in two categories: the ‘Carbon Reduction’ product supporting reduction activities of companies participating in the greenhouse gas emissions trading system, and the ‘Low-Carbon Ecosystem’ product supporting facility investments directly related to the ‘2050 Carbon Neutrality Promotion Strategy.’

The ‘Carbon Reduction’ product, prepared to serve as a catalyst for promoting low-carbon transition among top carbon-emitting companies, is designed to focus interest rate benefits on the industry's actual carbon reduction efforts by mandating pre- and post-verification procedures by external experts on carbon reduction effects, a first among domestic financial institutions.

To overcome the limitations of financial institutions lacking the capacity to measure carbon reduction amounts, KDB has organically collaborated with the Ministry of Environment and its affiliated organizations operating the greenhouse gas emissions trading system to establish standards regarding carbon reduction calculation procedures, verification methods, and selection of qualified external experts. Furthermore, to encourage companies' reduction activities in various ways, an incentive system has been introduced that expands interest rate discounts for facility investments with a high proportion of funds related to carbon reduction or for companies subject to paid allocation that bear relatively large cost burdens due to carbon emissions.

A KDB official stated, "Depending on this year's operational performance, we plan to extend the product operation period in the future and continuously advance operational techniques so that this product can develop into South Korea's ‘standard model of carbon finance.’"

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