The Ministry of Climate, Energy and Environment and the Korea Environmental Industry & Technology Institute (KEITI) have announced a significant expansion of the ‘Korean Green Bond and Green Asset-Backed Securities Issuance Support Program’ for 2024. This initiative incorporates the revised Korean Green Taxonomy, effective since December 2023, to broaden support for next-generation low-carbon technologies and expand funding options to meet corporate demand for decarbonization investments. Notably, green asset-backed securities will be issued by applying the Korean Green Taxonomy to asset securitization methods that enhance the creditworthiness of SME corporate bonds. Minister Kim Sung-hwan emphasized the importance of these policies during his keynote speech at the 8th Carbon Neutrality and Energy Policy Seminar.
With the revised taxonomy, new green economic activities such as heat pumps, clean methanol, and carbon-neutral ICT have been added to the list of eligible projects for green bond issuance support. From this year, SMEs can receive interest subsidies not only for facility funds but also for working capital related to green economic activities. New criteria reflecting the characteristics of industries like construction and shipbuilding have been established to improve accessibility to green bond issuance. Furthermore, the support period for interest costs on green asset-backed securities has been extended from one year to up to three years, significantly reducing the financial burden on participating companies.
This year, the Ministry will provide up to KRW 300 million per company to cover interest costs incurred when issuing green bonds or green asset-backed securities under the Korean Green Taxonomy. Listing fees and annual charges for green bond issuers will also be waived for one year until December 31, thanks to cooperation with the Korea Exchange. Seo Young-tae, Director of Green Transition Policy, stated, \”Enhancing access to green finance is crucial for companies pursuing decarbonization investments,\” and pledged continued support for private-led green investment and carbon neutrality.
Applications for the Korean Green Bond interest subsidy program will be accepted from June 12, and for the green asset-backed securities support program from June 21, via the Responsible Investment Platform (gmi.go.kr). Detailed information on announcements, eligibility, and support can be found on the Ministry\’s website (mcee.go.kr) or KEITI\’s website (keiti.re.kr). The expanded program is expected to play a key role in revitalizing Korea\’s green finance market and lowering entry barriers for SMEs into the green economy.