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2023. Nov VOL.668
- 2023. Nov VOL.668
- ENG
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2023. Nov VOL.668
Green bonds have begun to grow rapidly as ESG management and sustainability emerge as important global agendas with increasing concern over the climate crisis and other environmental problems. Green bonds are financial instruments to fund solely environment-friendly projects including renewable energy and anti-pollution projects. Unlike normal bonds, ESG bonds including green bonds are subject to a certain verification process by independent organizations such as accounting firms to ensure that these bonds strictly follow ESG principles in terms of the bond purpose, use of proceeds, the project selection procedure and fund management. In this sense, green bonds are viewed as a new benchmark for gauging the value of environmentally conscious companies. K-water became the first public enterprise other than public financial institutions to successfully issue green bonds in 2018. On its 30th annual bond issuance, K-water has issued green bonds worth CHF 250 million (equivalent to KRW 375 billion) in September. The successful issuance of green bonds is accredited to the know-how and credibility that K-water has earned over the years. It is worth noting is that these bonds were issued at a low interest rate of 2.1725%, for a cost savings of KRW 3.2 billion, compared to an issuance of the same bonds denominated in Korean won.
K-water won the Best Green Bond Award in the category of sustainable capital at ‘The Asset Triple-A Awards 2022’. The award recognizes K-water for its sustainability in water management capability and environmental achievements. The issuance of green bonds represents the culmination of K-water’s 30-year history of bond issuances, which were backed by its strengths of financial soundness and growth potential. The proceeds from green bonds are used to invest in projects aimed to reduce water-related disasters including drought and flood that are increasing due to climate change and in various eco-friendly projects including replacing old water supply facilities and increasing renewable energy.
K-water CEO Yun Seog-dae said, “The green bond issuance in Swiss franc is a global recognition for our consistent efforts to improve our financial structure including reduction in our debt ratio and the global competitiveness of our green projects,” and also underscored, “K-water will further strive to achieve sustainable growth and secure public confidence both at home and abroad.”
