Sejong, April 17 - The Ministry of Environment (Minister Han Wha-jin) and the Korea Environmental Industry & Technology Institute (KEITI, President Heung Jin Choi) announced that they started the ‘pilot project for supporting green asset-backed securities issuance’ to help boost the green investment by SMEs.

The KEITI signed an MOU with the Korea Credit Guarantee Fund (KODIT) for the pilot project on April 7, 2023.

The pilot project, which has a budget of KRW 4.5 billion, will provide up to KRW 300 million per company for interest costs incurred by companies issuing corporate bonds. The pilot project aims to issue green asset-backed securities worth about 150 billion won.

The green asset-backed securities are the first green financial products to be issued this year. The securities are issued by combining the method of securitizing assets based on corporate bonds as underlying assets to receive a higher credit rating and the K-Taxonomy.

It is expected that small and medium-sized companies that want to make green investments but cannot issue green bonds alone due to their low credit ratings will have a similar effect to issuing Korean green bonds when procuring funds needed to make investments in green projects, such as greenhouse gas reduction and higher energy efficiency.

SMEs participating in the pilot project will be able to directly procure funds needed to make green investments by issuing corporate bonds, thus helping to boost green investments by SMEs and utilizing the K-Taxonomy.

Applications were received from March 21 to April 3 for the pilot project, and the green asset-backed securities requested by the applicants are worth KRW 45 billion. The KODIT and the KEITI will determine if the applicant’s financial status and projects are suitable for the issuance of green asset-backed securities. After the final inspection by an independent external institution, the first green asset-backed securities will be issued in May 2023.

The KEITI plans to make the second announcement for the pilot project on its website (keiti.re.kr) in July 2023. 

Heung Jin Choi, President of the KEITI, stated, “We hope that this pilot project will provide an opportunity to broaden the utilization of the market with the K-Taxonomy and lower the barrier to green investment for SMEs.”

Contact: Kim Na-seung, Deputy Director

Green Transition Policy Division / +82-(0)44-201-6690

Foreign Media Contact: Chun Minjo(Rachel)

+82-(0)44-201-6055 / rachelmchun@korea.kr