Policy Financial Institutions Supply 42 Trillion Won in Climate Finance This Year, Achieving 74% of Annual Target

Financial Services Commission Holds First Meeting of Climate Finance Promotion Task Force
Detailing Transition Finance Guidelines and Linking Carbon Reduction Roadmaps

Five policy financial institutions, including Korea Development Bank, Export-Import Bank of Korea, and Korea Credit Guarantee Fund, supplied a total of 42 trillion won in climate finance this year. This amounts to 74.1% of the annual target.

The Financial Services Commission held the first meeting of the “Climate Finance Promotion Task Force (TF)” on September 14, chaired by the Director General of the Financial Policy Bureau, to evaluate progress such as the supply of climate finance, and to discuss ways for interagency cooperation for the stable introduction and market establishment of transition finance. The meeting was attended by officials from the Ministry of Climate, Energy and Environment, Ministry of Trade, Industry and Energy, Ministry of SMEs and Startups, Financial Supervisory Service, Korea Credit Information Services, Korea Federation of Banks, as well as private sector experts.

Previously, in February, the Financial Services Commission announced a “Plan for Promoting Climate Finance,” outlining its goal to supply a total of 790 trillion won in climate finance by 2035 over the next 10 years. By July of this year, policy financial institutions including Korea Development Bank, Export-Import Bank of Korea, Industrial Bank of Korea, Korea Credit Guarantee Fund, and Korea Technology Finance Corporation supplied 42 trillion won, achieving 74.1% of the annual target.

The Financial Services Commission plans to regularly review the supply performance of climate finance moving forward, while continuously discovering and disseminating outstanding support cases that meet the demand at the industrial field level.

In particular, the Commission will organically link transition finance guidelines and best practice standards, climate finance information infrastructure, and sector-specific carbon reduction roadmaps, in order to promote the development of related products by financial institutions. Through these initiatives, the aim is to ensure a smooth supply of funds necessary for companies' practical green transition.

Other ministries and agencies are also taking steps to promote transition finance. The Ministry of Climate, Energy and Environment presented the operating direction of the 2027 financial support project, which will provide support for bond and loan interest costs and guarantees for green and transition investments that align with K-Taxonomy, the Korean green classification system, and corporate transition strategies.

The Ministry of Trade, Industry and Energy plans to establish sector-specific green transition pathways that reflect the 2035 Nationally Determined Contributions (NDC) for five high carbon-emitting industries: steel, petrochemicals, cement, oil refining, and electronics assembly.

The Financial Supervisory Service has drafted best practice standards through a working-level TF operated with the financial sector to support the on-site application of the “Transition Finance Guidelines” announced in February. By gathering opinions from financial institutions, the final version will be confirmed by the end of October, and the launch of pilot products by financial companies will be supported. In addition, the agency is considering linking the sector-specific carbon reduction roadmaps, which will be developed by the Ministry of Trade, Industry and Energy by year-end, with the evaluation of transition finance.

Korea Credit Information Services is working to build a web portal to support the climate finance work of financial companies. The portal is designed to provide information necessary for the entire process of handling climate finance, from identifying eligible companies to determining suitability and post-management, thereby assisting financial institutions with their evaluation and management work.

A representative from the Financial Services Commission stated, “Going forward, we plan to regularly review policy progress through the climate finance task force and discuss on-the-ground challenges in the financial sector, as well as collaborative tasks among the relevant institutions. In subsequent meetings, we will sequentially discuss major topics such as strengthening the legal and institutional framework for promoting climate finance and linking sustainability disclosures and transition finance, thereby continuously reinforcing the collaborative network among involved entities.”

This content was produced with the assistance of AI translation services.