SK Telecom Secures 200 Billion KRW Through ESG-Preferred Loans for Outstanding Companies in Singapore

[Asia Economy Reporter Eunmo Koo] SK Telecom has received international recognition for its ESG (Environmental, Social, and Governance) management achievements, including efforts to reduce greenhouse gas emissions and improve energy efficiency, by securing a preferential loan for outstanding ESG companies.

On the 2nd, SK Telecom announced that it raised 200 billion KRW in funds with a three-year maturity through an ESG-linked corporate loan from DBS Group, Singapore's largest bank.

SK Telecom explained that as the leading telecommunications company in Korea, it received a preferential interest rate based on its efforts to reduce greenhouse gas emissions and improve energy efficiency, as well as maintaining a top-tier credit rating (AAA). The contract also includes an incentive clause that allows for further reductions in loan interest rates based on mutually agreed ESG achievements such as future greenhouse gas reduction and energy efficiency improvements. SK Telecom plans to utilize the borrowed funds from DBS Group for various corporate activities, including expanding eco-friendly network infrastructure.

SK Telecom evaluated that this contract is significant in confirming a virtuous cycle structure where ESG achievements lead to business activation. The company stated, "Through this contract, we secured funds under more favorable conditions compared to typical corporate bond issuance, proving that high ESG performance can translate into management achievements such as preferential interest rates. We also confirmed that various green financing options, including ESG-linked corporate loans in addition to ESG bond issuance, can be utilized."

Recently, green financing favorable to investments and funding for outstanding ESG companies has been activated in the global capital market. Besides SK Telecom, DBS Group provides loans linked to ESG performance to industry-leading companies such as Singtel, a global telecommunications company, and CDL, Singapore's largest real estate firm.

SK Telecom is strengthening ESG management based on ICT infrastructure by applying ‘Single-RAN technology,’ which reduces power consumption by approximately 53% through the integration and upgrade of 3G and LTE equipment to minimize the increase in power usage due to network expansion, and by signing a ‘Green Premium’ contract with Korea Electric Power Corporation for certification of renewable energy power usage.

Yoon Poong-young, Head of SK Telecom’s Corporate 1 Center, said, “Investments from domestic and international capital markets in companies committed to improving environmental and social issues are rapidly increasing,” adding, “We will continue to strengthen the virtuous cycle where proactive ESG efforts lead to enhanced corporate value.”

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