Sejong, February 28 - The Ministry of Environment (Minister Han Wha-jin) will pilot the interest subsidy for issuing green bonds to boost green finance by settling the K-taxonomy in the financial and industrial sectors early. The pilot project aims to issue green bonds worth KRW 3 trillion, providing an interest subsidy of a maximum of KRW 300 million per company incurred from issuing bonds. The total budget for this project is about KRW 7.7 billion. 

Green bonds are bonds whose issuing funds are used for green activities, as defined in the K-Taxonomy Guideline, and must be issued in compliance with the Green Bond Guidelines. The Ministry of Environment revised the Green Bond Guidelines in December 2022 by establishing a green bond issuance and management system, including introducing a conformity determination procedure to raise the reliability of investors for green bonds. Accordingly, the need for government support had been raised to settle K-taxonomy early in the market, prevent greenwashing, and induce private capital to be involved in green economic activities through green bonds. 

Through the pilot project, the Ministry of Environment will provide a partial interest subsidy to companies that have issued or plan to issue green bonds, considering the company's size and type of business. The Ministry will support the companies for one year from the bond issuance date. For middle-standing enterprises and SMEs eligible priorly for support, a 0.4% interest rate will be applied to the bond issue amount. A 0.2% interest rate will be applied to the bond issue amount for large companies and public organizations. 70% of the budget will be allocated to the related sectors to boost investment in the green sectors in the K-Taxonomy Guideline, such as renewable energy, so those investments can contribute to achieving the carbon neutrality goal.

Companies participating in the pilot project will be able to ease the burden that comes from the additional steps required to issue green bonds that are not needed to issue ordinary bonds, rising interest rates, and deteriorating market conditions. This way, they can continue issuing green bonds.

Companies interested in the project can apply from March 24, 2023, for two weeks on the Environmental Responsible Investment Platform www.gmi.go.kr). The announcement, eligibility, and other details can be found on the KEITI website www.keiti.re.kr). During the application period, a hotline (02-2284-1964) will be open to answer questions regarding the project and the s needed.

Chang Ki-Bok, Director General of Green Transition Policy Bureau, stated, "It is expected that the pilot project will boost green finance in the private sector by lowering the barriers to entry for companies to issue green bonds." He added, "The Ministry of Environment will do its best to achieve the carbon neutrality goal by 2050."

Contact: Kim Na-Seung, Deputy Director

Green Transition Policy Division / +82-(0)44-201-6690

Foreign Media Contact: Chun Minjo(Rachel)

+82-(0)44-201-6055 / rachelmchun@korea.kr