The South Korean government plans to supply a total of 790 trillion won in climate finance by 2035, with 42 trillion won already disbursed as of July this year. The government also aims to establish practical standards for transition finance by next month to support its implementation in the financial sector.
On September 14, the Financial Services Commission (FSC) announced that it held the first meeting of the Climate Finance Activation Task Force (TF), chaired by the Director of the Financial Policy Bureau, with participation from the Ministry of Climate, Energy and Environment, the Ministry of Trade, Industry and Energy, the Ministry of SMEs and Startups, and the Financial Supervisory Service.
According to the FSC, the government established a plan to supply a total of 790 trillion won in climate finance from 2026 to 2035, as announced in February. As of July, the amount supplied reached 42 trillion won, achieving 74.1% of the annual target and 127% of the cumulative target for July.
Support through policy finance institutions is also increasing. The Korea Development Bank invested 20 billion won in a manufacturer of electric motors and generators focused on hydrogen and ammonia-based energy production. The Export-Import Bank of Korea provided a loan of 200 billion won to a cable manufacturer involved in wind energy production. The Korea Credit Guarantee Fund supported an automotive parts company producing renewable and recycled materials with 7 billion won through a bond-backed security (P-CBO) method.
The government plans to regularly review the progress of policy implementation through the operation of the Climate Finance Related Institutions TF while also listening to the challenges faced by the financial sector. Additionally, discussions will be held to strengthen the legal and institutional framework for promoting climate finance, enhance sustainability disclosures, and explore linkages between transition finance.
Efforts to establish practical standards for the application of transition finance are also accelerating. The Financial Supervisory Service announced the 'Transition Finance Guidelines' in February and has been operating a practical TF with the financial sector. By the end of last month, the Financial Supervisory Service had supplemented detailed standards for each guideline provision and prepared a draft of practical best practices for handling transition finance.
The Financial Supervisory Service plans to finalize the guidelines by the end of next month after gathering feedback from the financial sector. Based on this, it will support the launch of pilot products for transition finance by financial companies and will review and discuss ways to link these with the 'industry-specific carbon reduction roadmap' by the end of the year.
* This article has been translated by AI.
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