KDB, Korea's First $100 Million Green Climate Fund Project Approved

Promotion of Energy Efficiency Improvement Projects in Indonesian Industry Sector through GCF Funding

Photo by Moon Honam, KDB Industrial Bank 자료사진 / Moon Honam 기자 munonam@

[Asia Economy Reporter Yoo Je-hoon] Korea Development Bank announced on the 21st that it has received approval for funding support worth 100 million USD (approximately 140 billion KRW) for climate change projects in developing countries for the first time domestically at the 34th Board of Directors meeting of the Green Climate Fund (GCF) held in Incheon from the 15th to the 20th.

The approved project, "Indonesia Industrial Sector Energy Efficiency Improvement Project," provides up to 95% GCF guarantees on loans made by local banks for energy efficiency improvement projects in industrial facilities within Indonesia. In addition to guarantees, GCF’s grant funding (5 million USD) will support activities such as capacity building for local institutions and fostering related industrial ecosystems.

Since 2020, Korea Development Bank has identified the project in collaboration with the ASEAN Centre for Energy (ACE), an energy research institution under the ASEAN Secretariat, designed the project and financial structure, negotiated with participating institutions, and prepared the project proposal and annex documents. The project passed the first review by the GCF Secretariat starting in August last year and the second review by external expert reviewers.

Meanwhile, the Ministry of Economy and Finance, a GCF board member and National Designated Authority (NDA), actively supported Korea Development Bank’s project development and approval process through close consultations with the GCF Secretariat and board outreach. The NDA serves as the communication channel with the GCF within the developing country government, playing key roles such as recommending local accreditation entities and issuing no-objection letters for projects in the host country.

Through this GCF cooperation project approval, Korea Development Bank has demonstrated its project structuring capabilities and financial advisory expertise as a global climate finance institution. In particular, by providing GCF guarantees to Korean banks operating in Indonesia, the bank explained that it can support various local green projects involving Korean financial institutions and domestic companies operating locally.

Korea Development Bank stated, "As the first and only GCF accredited institution in the domestic financial sector, based on the experience and know-how accumulated during this approval process, we will continue to discover and promote various cooperative projects with the GCF. We will provide opportunities to utilize GCF funds, which are long-term low-interest funds, to Korean companies advancing into overseas climate markets in diverse fields such as renewable energy, E-Mobility, hydrogen, and water industries, and further solidify our position as a climate finance specialist in the global financial market."

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