[Photo provided by SK Innovation Co.]

South Korea’s battery maker SK Innovation Co. has successfully sold about 800 billion won ($658.3 million) worth green bonds denominated in U.S. dollar and Chinese yuan at favorable terms than conventional debts. The proceeds will be used to invest in its electric vehicle battery factories overseas.

SK Innovation said Thursday that it raised 800 billion won in green financing - $620 million and 500 million yuan ($70.9 million) each from European, U.S. and Chinese investors. The loans that will be delivered from this month to next year were issued at a spread of 98 to 99 basis points over the three-month Libor interest rate, lower than conventional loans provided at a spread of 110 to 120 basis points on average, thanks to strong demand from global banks.

Green lending, a corporate financing scheme that grants a lower lending rate to a company investing in environmentally-friendly businesses including renewable energy, EV and energy efficiency projects. Lenders offer loans after assessing sustainability strategies and objectives reported by a borrower who can receive funds whenever necessary. The funds must be used just for environmental purposes and the borrower should keep informing the banks on the use of the funds to ensure transparency.

[Photo provided by SK Innovation Co.]

SK Innovation has become the first Korean company to raise funds through green loans. The company said it will invest the proceeds in its electric vehicle (EV) battery manufacturing plants in the U.S. and Hungary and lithium-ion battery separator (LiBS) factories in China and Poland which have been under construction.

SK Innovation would have a capacity of producing 40 gigawatt hours (GWh) of batteries when its EV battery plants in Georgia of the U.S. and Komarom of Hungary begin commercial operation in 2022 as scheduled.

The company also aims to become a leading LiBS manufacturer in the global market by achieving 30 percent market share by 2025 after completing construction of its new plants in China and Poland.

By Chung Seok-hwan and Choi Mira

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