KB Financial Group Chairman Yoon Jong-kyoo and Shinhan Financial Group Chairman Cho Yong-byoung
A green fund jointly invested in by two South Korean banking giants -- KB and Shinhan-- will partly finance a renewable energy project in Sweden, officials said Thursday.
The financial holding firms invested a combined 80 billion won ($68.4 million) in the Global Green Energy Partnership Fund set up in April last year.
Korea Midland Power, Korea Hydro & Nuclear Power and Sprott Korea Investment also joined the fund designed to facilitate development of renewable energy across the globe, officials said.
The joint fund is divided into two types, which are denominated in the euro and Korean won. The groups’ flagship lenders -- KB Kookmin Bank and Shinhan Bank -- injected a total of 40 billion won in the euro-denominated fund, while the groups’ insurance units -- KB Insurance and Shinhan Life Insurance -- injected a combined 40 billion won in the won-denomiated fund, they added.
The fund is the first investor to “Guba Buget Project,” an infrastructure project led by the Swedish government. It is aimed at building a wind power plant with a capacity of 64.4 megawatts in the country.
Along with pooling money for the project in Sweden, KB Kookmin Bank and Shinhan Bank issued a letter of credit for the Guba Buget Project. They plan to offer financial consulting services to companies participating in the project.
Having the Swedish project as a starter, KB and Shinhan said they would reach out for other green energy projects around the globe.
“The latest joint investment would be a good example of local banking groups’ entry into the overseas renewable energy market, especially considering that the firms can provide financial solutions for global developers of green energy,” a KB Financial official said.
“(Shinhan Financial) will continue to strengthen our ESG management by actively promoting the group‘s ESG goals, including zero carbon drive,” a Shinhan Financial official said.
By Choi Jae-hee (firstname.lastname@example.org