SEOUL, Nov. 12 (Korea Bizwire) — Green bond issues in South Korea more than doubled this year as energy and chemical firms sought to capitalize on low costs and burnish their corporate image, industry sources said Tuesday.
The value of green bonds floated by 11 state and private companies totaled 6.04 trillion won (US$5.18 billion) in the first 10 months of this year, compared with 2.4 trillion won in 2018.
Green bonds are meant to raise money for environmentally friendly facilities and equipment or environmental projects.
Energy and chemical companies accounted for 60 percent of the total, with private businesses taking up 46 percent. The proportion for private enterprises came to a mere 15 percent last year.
LG Chem Ltd., South Korea’s leading chemical firm, was the single-largest issuer. In April, LG Chem sold $1.56 billion in green bonds to build a battery plant for electric vehicles.
LG Chem was the first local chemical company to issue green bonds, with energy firms such as SK Energy and Hanwha Energy following suit.
Market watchers said private companies are increasingly taking advantage of green bonds, which are deemed a means of raising funds at low rates and boosting corporate image.
“The issuance of green bonds has risen sharply this year as energy and chemical companies view eco-friendly projects as a new growth engine,” an industry source said.