South Korea’s KB Financial Group [KB:US] and Shinhan Financial Group [SHG:US] jointly spent KRW80bn (USD68m) on a 45% stake of Sweden’s Gubbaberget Wind Farm through their Global Green Energy Partnership Fund, as reported by the Korea Economic Daily on September 17. Specifically, KB Kookmin Bank, KB Insurance, Shinhan Bank, and Shinhan Life Insurance, four subsidiaries of the two financial groups, each injected KRW20bn. Apart from the capital injections, Kookmin Bank and Shinhan Bank also issued a letter of credit and will provide financial consulting services for the project. In addition, Korea Electric Power Corporation’s (KEPCO) [KEP:US] wholly-owned subsidiary Korea Midland Power (KOMIPO) will buy the rest of 55% of the wind power project and oversee it. The wind farm is expected to have an electricity generation capacity of 74.4 megawatts (MW).
KB, Shinhan, KOMIPO, KEPCO’s other unit Korea Hydro & Nuclear Power (KHNP), and Canadian asset manager Sprott’s Sprott Korea Investment established the Global Green Energy Partnership Fund in April this year. Sprott Korea and Shinhan Asset Management manage the fund together. The Swedish wind plant is the first investment after the launch of the green fund. Following that, KB and Shinhan aim to build the fund as a renewable energy co-investment vehicle to reach out to other green energy projects globally, together with the three other participants. In the meantime, the two financial groups also intend to comply with ESG standards and achieve their sustainability targets through green investment. According to its Green Wave 2030 initiative, KB is planning for more ESG-themed financial products, aiming at a scale of up to KRW50tr by 2030 through investments and loans. Shinhan also released its Zero Carbon Drive with the goal to achieve zero emissions in its loan portfolio, which requires its corporate clients to reach carbon neutrality by 2050.