To Receive 5 Tril. Won in Loans from KDB over 5 Years
Hanwha Group has decided to receive up to 5 trillion won in financial support from Korea Development Bank (KDB) over the next five years for investment in eco-friendly energy such as solar energy and hydrogen.
The group plans to use the funds for merger and acquisition (M&A) deals and research and development (R&D) activities in the eco-friendly sector.
Hanwha and KDB signed an agreement on the Industry and Financial Cooperation Program for Green Energy Promotion at Hanwha Solution Q CELLS Plant in Jincheon, North Chungcheong Province on May 12. On hand were Kim Dong-kwan, president of Hanwha Solutions and the eldest son of Hanwha Group chairman Kim Seung-yeon, and representatives of Hanhwa Group affiliates and KDB Chairman Lee Dong-gull.
The industry-financial cooperation program is led by the two state-run banks, KDB and the Export-Import Bank of Korea to support companies that need a large amount of money to expand their new businesses. KDB signed this agreement with LG Chem for the first time in December 2019 to support the secondary battery industry. In January 2021, it signed an agreement with SK Hynix to foster the semiconductor industry. The Export-Import Bank of Korea also signed an agreement with Hyundai Motor in April to support the future mobility industry. The agreement with Hanwha is the fourth of its kind and the first in the eco-friendly field such as green energy.
Under the agreement, KDB will lend up to 5 trillion won to Hanwha at low interest rates over the next five years. Hanwha and KDB also agreed to create an ESG (environmental, social and governance) fund worth 100 billion won to foster small and medium-sized businesses related to green technology. Hanwha and KDB are going to invest 30 billion won each and raise the remaining 40 billion won from the private sector by end of 2021. The fund plans to provide low-interest funding to small and medium-sized enterprises.
Hanwha plans to actively promote M&A deals, R&D and recruitment of human resources from global companies related to solar energy and hydrogen. It announced in August 2018 that it will invest up to 9 trillion won in solar energy over the next five years. It plans to issue green bonds to secure enough funds. According to the group, Hanwha affiliates will issue 700 billion won in green bonds in 2021.
Hanwha Solutions, the group's leading eco-friendly business affiliate, plans to actively invest in solar power projects in the United States and Europe. The company is also planning to accelerate development of next-generation high-efficiency solar modules. In addition, it is planning to make large-scale investments in green hydrogen, which is produced with renewable energy such as solar and wind power.
Hanwha Solutions’ strategy is to strengthen competitiveness by increasing business capabilities in all stages of the hydrogen value chain from production to storage and distribution. Hanwha General Chemical plans to make a foray into the eco-friendly private power generation business with hydrogen as an energy source through the development of hydrogen-enriched gas turbines.