SK Geocentric wins W475b loans on ESG initiatives

(L to R) BNP Paribas Corporate Finance Director Seo Jong-gab, French Banking Group Korean Director Philippe Noirot, SK Geocentric CEO Na Kyung-soo and Corporate Strategy Director Choi Ahn- sub pose for a photo after a signing ceremony in Seoul on Tuesday. (SK Geocentric)

SK Geocentric, a chemical materials unit of South Korean conglomerate SK Group, said on Tuesday it had secured loans worth 475 billion won ($358 million) from global banks, in recognition of the company’s future plans. company for its environmental, social and governance initiatives.

SK Geocentric held a signing ceremony for a three-year agreement for sustainability-related loans with five global financial institutions: BNP Paribas in France, Agricultural Bank of China, Bank of China, Mitsubishi UFJ Financial Group in Japan and Crédit Agricultural CIB in France.

Attendees at the ceremony included SK Geocentric CEO Na Kyung-soo, Kim Yang-seob, group head of SK Innovation’s finance division, and key executives from the banks involved.

With this agreement, SK Geocentric has become the first national company to win the sustainability-related loan in the country with recognition from Det Norske Veritas, an international certification body, according to the company.

Sustainability-linked lending refers to lending instruments that incentivize the borrower to achieve predetermined sustainability performance targets. When the objectives are achieved, the banks grant the companies concerned interest rate advantages.

SK Geocentric had previously submitted eco-friendly management targets to DNV and global banks, which returned the favor with positive reviews.

Plans included increasing the scale of plastic recycling to 900,000 tonnes by 2025 and reducing greenhouse gas emissions by 24.9% by the same year.

The company said it aims to use the acquired funds for various ESG-related ventures, including the creation of Ulsan Recycling Cluster – a cluster that is expected to be built from 2025 and is expected to be responsible for recycling 250,000 tonnes of plastic waste.

“It is very significant that large-scale financing for the company’s environmentally friendly activities, such as the recycling of plastic waste, has been achieved and recognized in the form of the first sustainability-linked loan (du country), with verification from a global certification agency,” said Na.

“SLL achieves the cooperation of banks and companies in updating ESG objectives”, added Philippe Noirot, CEO of BNP Paribas.

“We will work together to make SK Geocentric a leading company in the field of the environment, its activities solving the problems of plastic waste.”

The acquisition of a large-scale fund comes amid growing liquidity crisis risks for domestic companies, as the country has recently suffered the effects of a series of interest rate hikes and the default of payment by Legoland.

By Lee Yoon-seo ([email protected])

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