LG Innotek Secures $200 Million from IFC, Demonstrating ESG Management Excellence

Investment in Expansion of Haiphong Manufacturing Subsidiary in Vietnam
Meeting IFC Standards under the World Bank Group
60% of Electricity Usage Converted to Renewable Energy

LG Innotek has become the first Korean company to secure a loan of 200 million US dollars (approximately 279 billion KRW) from the International Finance Corporation (IFC).

On September 24, LG Innotek announced that it had successfully raised a large-scale fund from the IFC in recognition of its achievements in ESG (Environmental, Social, and Governance) management. The IFC, an institution under the World Bank Group, is an international financial organization that supports private sector investment.

LG Innotek applied for a Sustainability-Linked Loan (SLL) from the IFC last year, aiming to invest in the expansion of its manufacturing subsidiary in Haiphong, Vietnam. With this, the company has become the first Korean enterprise to secure a total of 200 million US dollars in funding. The loan has a maturity of eight years.

The SLL is an international financial system first introduced in 2017 to encourage the spread of ESG management among global corporations. The higher a company’s ESG management and compliance indicators, the greater the interest rate reduction benefits it receives.

Unlike green loans, which require funds to be used exclusively for ESG-related projects, the SLL allows funds to be used for various purposes. As a result, the approval process is more rigorous, and the regulations for loan execution management and supervision are stricter. During the loan period, the company must achieve the ESG management targets agreed upon with the bank in advance in order to continue enjoying benefits such as low interest rates.

Jihwan Park, CFO of LG Innotek (executive director on the right), and Carsten Muller, Asia-Pacific Regional Industry Officer for Manufacturing and Agriculture Services at the International Finance Corporation, are taking a commemorative photo after signing the Sustainability-Linked Loan (SLL) agreement at the Magok ISC in Gangseo-gu, Seoul. LG Innotek.

An LG Innotek representative explained, “By meeting the stringent standards of a credible international organization and successfully securing SLL funding, LG Innotek has once again demonstrated its world-class ESG management capabilities, not only in Korea but also globally.”

The company previously announced its goal to achieve ‘RE 100 (100% renewable energy)’ for all business site electricity consumption by 2030, and to reach carbon neutrality by 2040.

After establishing a systematic roadmap to achieve these goals, LG Innotek converted 638 GWh-nearly 60% of the electricity used at its domestic and overseas business sites in 2024 alone-to renewable energy. Among Korean companies that have declared participation in RE100, excluding Korea Water Resources Corporation, which operates renewable energy businesses, LG Innotek has achieved the highest conversion rate. Notably, two domestic sites-Paju and Gumi 1A-as well as Vietnam, already achieved RE100 last year.

As a result, in 2024, LG Innotek received a ‘Leadership A grade’ in the Carbon Disclosure Project (CDP) climate change response assessment and was named the top carbon management company for the third consecutive year.

Carsten Mueller, Head of Asia Pacific Industrial Sector at IFC Manufacturing, Agriculture, and Services, stated, “We are pleased that IFC’s first SLL agreement with a Korean company is with LG Innotek. IFC will continue to pursue various collaborations with LG Innotek to promote sustainability.”

Jihwan Park, CFO (Executive Director) of LG Innotek, commented, “The funds raised from the IFC are a meaningful financial achievement resulting from our sincere ESG management activities. LG Innotek will continue to lead in ESG management and grow as a company that delivers differentiated customer value.”

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