Korea Development Bank (KDB), Export-Import Bank of Korea (Korea Eximbank) and Nonghyup Bank have signed a 550 million euro (some 700 billion won) green loan contract with LG Chem, which is making large-scale investments to strengthen global competitiveness in the secondary battery sector, called a future strategic industry.
Green loan refers to a loan system that has limited use of loans to eco-friendly related areas such as electric vehicles, new & renewable energy and high-efficiency energy.
It is the first case of financial cooperation since the signing of the "industrial and financial cooperation program to foster the secondary battery industry" worth $5 billion between some financial institutions, including KDB, and LG Chem in December 2019.
With this contract, LG Chem is expected to be able to secure stable investment funds for the expansion of its battery plant in Poland and carry out its plan to significantly expand its global electric vehicle battery production capacity to about 100 GWh (about 1.7 million electric vehicles) by the end of this year.
LG Chem is planning to use the funds it raised this time to expand its electric vehicle battery plant in Poland. LG Chem is expected to invest about 3 trillion won ($2.5 billion) in battery facilities this year.
Based on the current backlog of orders for electric vehicle batteries worth about 150 trillion won ($123 billion), LG Chem plans to raise 30 trillion won ($24.6 billion) in sales in the battery sector alone in 2024.
Vice President Cha Dong-seok said, "This green loan procurement will greatly help us continue our investment for the future of the battery business. We will actively cooperate with financial and small and medium-sized suppliers to contribute to strengthening the competitiveness of the country's industries as well as dominating the global battery market."