The Korea Development Bank (KDB) announced on July 2 that it has issued 5-year euro-denominated green bonds worth 500 euros (US$564.90 million or 661.22 billion won) in the Euro market. The bonds carry a coupon rate of 0.019 percent, opening an era of zero interest rates in the South Korean euro-denominated public issues market.
The state-run bank issued the bonds to invest in project financing (PF) projects for environmental protection and renewable energy projects such as solar power, wind power and sewage treatment facility.
The KDB said the latest issuance confirmed investors’ interest in green bonds and recognition of South Korean bonds as risk-free assets. Subscriptions to the bonds exceeded 2 billion euros (US$2.26 billion or 2.64 trillion won), four times the amount issued. The 104 subscribers included European central banks and international financial organizations. Among them, 46 percent were central banks, international financial institutions and pension funds, 37 percent were asset management companies, 10 percent banks and 7 percent insurance firms.
The bank, which received Green Climate Fund’s accreditation for the first time in South Korea in 2016, has actively adopted global standards on environmental, social and governance (ESG) projects.
The state lender has issued ESG bonds worth 1 trillion won (US$854.34 million) and US$870 million (1.02 trillion won) in total so far.