Policy finance institutions supply W42tr in climate finance through July, hitting 74% of annual target

South Korea's financial authorities have channeled 42 trillion won ($31.2 billion) in climate finance through policy finance institutions as of July, with practical standards for transition finance screening and product development set to be finalized in October.

The Financial Services Commission held the inaugural meeting of its Climate Finance Activation Task Force at Government Complex Seoul on Monday, reviewing progress on climate finance disbursements and the development of a transition finance regime.

The five policy finance institutions — Korea Development Bank, the Export-Import Bank of Korea, Industrial Bank of Korea, Korea Credit Guarantee Fund and Korea Technology Finance Corporation — had collectively supplied 42 trillion won in climate finance as of the end of July, reaching 74.1 percent of the annual target of 56.7 trillion won. The figure also represents 127 percent of the cumulative July target of 33.1 trillion won. The government announced in February a plan to supply a total of 790 trillion won in climate finance over the 2026–2035 period.

By institution, Korea Development Bank supplied 14.9 trillion won, the Export-Import Bank of Korea 12 trillion won, Industrial Bank of Korea 3 trillion won, Korea Credit Guarantee Fund 7.8 trillion won and Kibo 4.3 trillion won.

Authorities are also moving to flesh out practical standards for transition finance. The Financial Supervisory Service completed a draft set of best-practice guidelines for transition finance at the end of last month and plans to finalize them by the end of October after gathering feedback from the financial sector. The Ministry of Trade, Industry and Energy will develop carbon-reduction roadmaps for five industries — steel, petrochemicals, cement, oil refining and electronics assembly — and link them to transition finance screening criteria.

Korea Credit Information Services is supporting the identification of eligible companies, assessments of K-Taxonomy compliance and post-disbursement management through a climate finance web portal that launched officially in August. Starting next year, the agency plans to centrally manage green lending and transition finance data at the account level and provide related statistics.

The FSC said it plans to use the interagency task force to discuss improvements to climate finance-related laws and regulations, sustainability disclosure requirements and measures to link them with transition finance.