Korea Development Bank Selected as Financial Arranger for Daejeon Sewage Treatment Plant Facility Modernization Private Investment Project
Selected as the PF Financing Arranger for the Largest-Ever Private Investment Project in the Environmental Sector
[Asia Economy Reporter Song Hwajeong] The Korea Development Bank (KDB) announced on the 22nd that it has been selected as the project financing (PF) arranger for the Daejeon Sewage Treatment Plant Facility Modernization Private Investment Project, jointly with KDB Infrastructure Asset Management.
This project involves relocating and modernizing the existing aging sewage treatment plant located in Daejeon City. It is expected to contribute to improving the quality of life for residents in the Daejeon area by reducing odors, with construction starting this year and completion targeted for 2027.
This project is the largest-scale private investment project in the environmental sector to date (total investment cost approximately 1 trillion KRW), symbolizing its significance. It is being conducted under a profit-sharing (BTO-a) model, which lowers downside risk and is therefore regarded as a safe asset. Driven by the increasing preference of domestic financial institutions for ESG (Environmental, Social, and Governance) projects, strong market interest is anticipated.
A KDB official stated, "As a policy financial institution, we will focus our capabilities and expertise on successful financial arrangement based on our extensive experience with large-scale social overhead capital (SOC) projects accumulated so far and our high level of expertise in green finance," adding, "We aim to conclude the financial agreement within this year."
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In addition to this project, KDB announced that it will continue to strengthen the role of policy PF financing in the domestic ESG finance market, including offshore wind power, clean transportation (hydrogen and electric vehicle charging facilities), and environmental improvements (sewage treatment, waste treatment).
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