Government to Double Budget for Green Bond Support

Budget Expanded to 13.7 Billion This Year
Additional Related Securities Issuing Institutions Included

Han Hwa-jin, Minister of Environment, is attending the Cabinet meeting held at the Government Seoul Office in Jongno-gu, Seoul on the 30th. Photo by Dongju Yoon doso7@

This year, the government support budget for 'green bonds' issued to raise funds for eco-friendly projects will increase to 13.7 billion KRW, more than double last year's amount.

On the 10th, the Ministry of Environment announced that it will more than double the budget for the support project for issuing green asset-backed securities by small and medium-sized enterprises (SMEs) and mid-sized companies compared to the previous year, and add more institutions authorized to issue related securities.

Green asset-backed securities are securities issued by combining the Korean Green Classification System with an asset securitization method that strengthens credit by using corporate bonds of SMEs and mid-sized companies as underlying assets.

The Ministry of Environment and the Korea Environmental Industry & Technology Institute, in cooperation with the Korea Credit Guarantee Fund, issued green asset-backed securities worth 155.5 billion KRW last year based on the underlying assets of 74 SMEs and mid-sized companies. These companies saved an average of 74 million KRW in interest costs through government support projects.

The Ministry of Environment explained, "This year, the support budget has been expanded to more than double from 6 billion KRW last year," adding, "We plan to support interest costs incurred from corporate bond issuance and external review costs for assessing compliance with the Korean Green Classification System."

Additionally, the Korea Technology Finance Corporation will be added as a securities issuing institution. Currently, only the Korea Credit Guarantee Fund is designated. The support project will accept applications from the 22nd of this month until the 8th of next month via the Ministry of Environment's website or the Korea Environmental Industry & Technology Institute's website.

The environmental authorities plan to review whether the financial status of the applying companies and the nature of their business are suitable for issuing green asset-backed securities, and starting from March this year, issue securities a total of four times in the first half of the year.

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