The Ministry of Climate, Energy and Environment and the Korea Environmental Industry & Technology Institute (KEITI) announced a major expansion of the ‘Korean Green Bond and Green Asset-Backed Securities (ABS) Issuance Support Program’ for 2024. This initiative reflects the revised Korean Green Taxonomy from December 2023, aiming to broaden support for next-generation low-carbon technologies and expand funding coverage to meet corporate decarbonization investment needs. Green ABS are issued by incorporating the Korean Green Taxonomy into asset securitization based on SME corporate bonds, enhancing creditworthiness. Minister Kim Sung-hwan highlighted the significance of these policies during his keynote speech at the 8th Carbon Neutrality and Energy Policy Seminar.
The revised taxonomy now includes heat pumps, clean methanol, and carbon-neutral ICT as eligible activities for green bond issuance support. SMEs can now receive interest subsidies not only for facility funds but also for working capital related to green economic activities. New criteria for facility fund recognition have been established to reflect the characteristics of industries such as construction and shipbuilding. Support for green ABS issuers has been strengthened, with interest cost subsidies extended from one year to up to three years, easing financial burdens. In 2024, companies can receive up to KRW 300 million per company in interest cost support for green bond or green ABS issuance.
With cooperation from the Korea Exchange, listing fees and annual charges for green bond issuers will be waived for an additional year until December 31. Seo Young-tae, Director of Green Transition Policy at the Ministry, emphasized the importance of improving access to green finance for companies pursuing decarbonization investments. He stated that continuous support for Korean green bonds and green ABS will expand private-led green investment and help realize carbon neutrality. Applications for the green bond interest subsidy program open on the 12th, and for the green ABS support program on the 21st, 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). Inquiries can be made to the Ministry’s Green Industry Innovation Division (044-201-6706) or KEITI’s Green Investment Support Office (02-2284-1974). This policy expansion is expected to enhance SME access to green finance, stimulate private-led green investment, and play a crucial role in achieving national carbon neutrality goals. The market utility of green bonds and green ABS is anticipated to increase further in the future.