SK Geocentric, a chemical materials unit of South Korean conglomerate SK Group, said Tuesday it had secured loans worth 475 billion won ($358 million) from global banks, in recognition of the company's future plans for its environmental, social and governance initiatives.
SK Geocentric held a signing ceremony for a three-year agreement for sustainability-linked loans with five global financial institutions: France's BNP Paribas, Agricultural Bank of China, Bank of China, Japan's Mitsubishi UFJ Financial Group and France's Credit Agricole CIB.
Participants of the ceremony included SK Geocentric CEO Na Kyung-soo, Kim Yang-seob, head of finance division group of SK Innovation, and major executives of the involved banks.
With this agreement, SK Geocentric became the first domestic company to win the sustainability-linked loan in the country with recognition from Det Norske Veritas, an international certification body, according to the company.
Sustainability-linked loans refer to loan instruments that incentivize the borrower's achievement of predetermined sustainability performance objectives. When the objectives are met, banks award the concerned companies with interest rate benefits.
SK Geocentric had previously submitted eco-friendly management goals to DNV and the global banks, who reciprocated with positive reviews.
Plans included increasing the scale of recycling plastic to 900,000 tons by 2025 and reducing greenhouse gas emissions by 24.9 percent by the same year.
The company said it is aiming to utilize the acquired funds for various ESG value-related businesses, including the establishment of a recycling cluster in Ulsan -- a cluster set to be constructed starting 2025 and planned to be responsible for recycling 250,000 tons of waste plastic.
"It is very meaningful that large-scale financing for the company's eco-friendly business, such as waste plastic recycling, was carried out and recognized in the form of (the country's) first sustainable-linked loan, with the verification of a global certification agency," said Na.
"SLL achieves cooperation of banks and companies in actualizing ESG goals," added Philippe Noirot, CEO of BNP Paribas.
"We will work together to have SK Geocentric grow into a leading company in environmentalism, with their businesses solving waste plastic problems."
The procurement of a large-scale fund comes amid risks of growing liquidity stress for domestic companies, as the nation lately suffered under the effects of series of interest rate hikes and the Legoland debt default.