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, have supplied a total of 42 trillion won in climate finance this year. This amounts to 74.1% of the annual target.

On September 14, the Financial Services Commission held the first meeting of the "Climate Finance Promotion Task Force (TF)" chaired by the Head of the Financial Policy Bureau. The meeting reviewed the results of climate finance supply so far and discussed ways for relevant organizations to cooperate to ensure the stable introduction and market settlement of transition finance. Attendees included officials from the Ministry of Climate, Environment and Energy, 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 its "Plans for Promoting Climate Finance" and set out a plan to supply a total of 790 trillion won in climate finance over the next 10 years by 2035. By July of this year, 42 trillion won had been supplied through policy financial institutions such as Korea Development Bank, Export-Import Bank of Korea, Industrial Bank of Korea, Korea Credit Guarantee Fund, and Korea Technology Finance Corporation, achieving 74.1% of this year's annual target.

Going forward, the Financial Services Commission plans to regularly review the performance of climate finance supply and continuously identify and disseminate best practices that align with the needs of industrial sites.

In particular, the guidelines for transition finance, operational best practices, climate finance information infrastructure, and industry-specific carbon reduction roadmaps will be organically linked to promote the development of related financial products by financial companies. Through this, the aim is to ensure the smooth supply of funds necessary for companies' substantive green transition.

Relevant ministries and agencies are also taking measures to promote transition finance. The Ministry of Climate, Environment and Energy outlined plans for a 2027 fiscal support program, supporting interest costs on bonds and loans as well as guarantees for green and transition investments that align with the Korea Taxonomy and corporate transition strategies.

The Ministry of Trade, Industry and Energy plans to establish industry-specific green transition pathways reflecting the country's 2035 Nationally Determined Contribution (NDC) targets for the five high-carbon-emitting industries: steel, petrochemicals, cement, refining, and electronics assembly.

The Financial Supervisory Service has prepared a draft of operational best practices through a working-level task force with the financial sector to support the practical application of the transition finance guidelines announced in February. After gathering feedback from the financial sector, a final version will be confirmed by the end of October, and the launch of pilot financial products by financial companies will be promoted. There are also plans to review ways to link industry-specific carbon reduction roadmaps, to be prepared by the Ministry of Trade, Industry and Energy by year-end, with the screening of transition finance.

Korea Credit Information Services is working to establish a web portal to support financial companies in their climate finance work. The portal will provide all the necessary information for the entire process of handling climate finance, from identifying eligible companies and assessing their suitability, to post-management, thereby supporting the screening and management work of financial companies.

An official from the Financial Services Commission stated, "Going forward, we will regularly check the policy progress through the climate finance task force and discuss on-site challenges faced by the financial sector, as well as cooperation tasks among related institutions." The official added, "In future meetings, we plan to sequentially discuss key issues such as strengthening the legal and institutional framework for promoting climate finance, linking sustainability disclosures with transition finance, and will continuously reinforce the cooperation system among related organizations."

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