Considering Issuance of 'Green Bonds' for Eco-Friendly Infrastructure Investment

Confidence in Inclusion in the World Government Bond Index (WGBI)
Deputy Prime Minister Choi Sang-mok Visits Pohang Steelworks on the 17th

The government has decided to consider issuing green bonds in light of the increased demand for domestic government bonds from overseas investors due to the inclusion in the World Government Bond Index (WGBI).

On the 17th, Choi Sang-mok, Deputy Prime Minister for Economy and Minister of Strategy and Finance, held an on-site meeting to promote investment at POSCO Pohang Steelworks with related ministers and vice ministers, including Kang Do-hyung, Minister of Oceans and Fisheries, and Park Sung-taek, 1st Vice Minister of the Ministry of Trade, Industry and Energy, and announced this plan.

Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok visited POSCO Pohang Steelworks on the afternoon of October 17 to promote investment activation with POSCO Group, touring the No. 2 Steel Plant operation site and listening to explanations from officials.

Deputy Prime Minister Choi explained, “Until now, the conditions for issuing green bonds were not favorable, so it was put aside, but since global demand for Korean government bonds and trust in them have been somewhat recognized, we are confidently considering issuance.”

He added, “Investment costs are necessary for the green transition,” and “While the government can play a pioneering role, utilizing private capital is an effort to create new industrial sectors.” He also noted, “Since it is still in the review stage, it is difficult to comment on specific scales.”

Green bonds are government bonds whose raised funds are restricted to be used for eco-friendly projects and infrastructure investment expenditures. The Ministry of Strategy and Finance plans to consider using green bonds to support reduction activities and to allocate the proceeds as resources for the Climate Response Fund. The government stated that issuing green bonds is expected to help establish Korea’s position in the advanced government bond market.

Deputy Prime Minister Choi also clearly stated that the government will support companies’ efforts toward carbon neutrality. During the meeting, opinions were raised on the need to strengthen financial support for POSCO’s carbon reduction investments. Choi said, “The more companies strive to reduce carbon, the greater the effect on achieving the nation’s carbon reduction goals,” and “there were suggestions to review institutional improvements to support such efforts.”

While inspecting the planned landfill site for hydrogen reduction steelmaking and the operation site of the 2nd steel plant, he announced plans to increase private green finance from 6 trillion won this year to 9 trillion won next year, and to expand fiscal support for research and development of core carbon-neutral technologies from 2 trillion won this year to 2.2 trillion won next year. Institutional improvements related to the emissions trading system, such as easing the carryover restrictions and managing volatility, will also be promoted within the year to allow companies subject to the system to operate emission permits more freely.

Deputy Prime Minister Choi stated, “We will actively support the smooth implementation of POSCO Group’s 73 trillion won investment plan.” He added, “At this critical time for economic recovery and securing continuous growth engines, swift and proactive investment is important. We will continue to discover additional on-site waiting projects and prepare related measures for the third investment activation plan scheduled to be announced next month.”

Through the Supply Chain Stabilization Fund launched last month, investments related to stabilizing supply chains, such as securing stable raw materials, will also be actively expanded. In particular, four POSCO Group companies related to secondary battery materials were selected as leading businesses in August this year and will receive additional preferential interest rates and other support for investments aimed at stabilizing the supply chain.

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