KOREA
BEYOND COAL

Investment in coal no longer acceptable!

April 5th of 2022, Korea Beyond Coal (KBC) held a press conference in front of NH Investment & Securities' headquarters to condemn securities firms' corporate bond management and demand asset managers to refuse to take over the bonds.

Samcheok Coal Power Plant, which is being built in Samcheok, Gangwon-do, will issue 180 billion won worth of public bonds by the end of this month, with six securities firms including NH Investment & Securities, KB Securities, Korea Investment & Securities, Mirae Asset Securities, Shinhan Financial Investment, and Kiwoom Securities.

Samcheok Coal Power Plant has constantly been criticized for a number of problems. It will emit huge greenhouse gases, hindering Korea's achievement of carbon neutrality in 2050 and deteriorate the health of local residents with air pollutants. If coal power generation loses its economic feasibility and the power plant utilization rate is lower than expected, the risks of financial institutions that invested in Samcheok Blue Power are also expected to increase. In addition, various environmental problems such as coastal erosion caused by port construction have occurred, and the opposition of Samcheok citizens has not subsided. KBC pointed out, "Financial institutions' reluctance to stop actual investment in coal-fired power generation projects is hard to avoid criticism as 'green washing' and 'false declaration,'” adding, "The withdrawal of investment in coal power generation and related facilities is already a global trend."

Of the six securities firms, five, excluding Kiwoom Securities, have declared coal exit financing, but they are still assisting Samcheok Blue Power in issuing corporate bonds, holding initial contract as an excuse. Last year, asset management companies, which account for 88.6% of the total bond size, declared coal exit and said they would not take over Samcheok Blue Power's corporate bonds.

Samcheok Blue Power raises 1 trillion won out of 4.9 trillion won in business expenses by issuing corporate bonds and has issued 300 billion won worth of corporate bonds. The most recent attempt to raise funds was to issue bonds worth 100 billion won in June last year, but all of them remain unsold due to the growing atmosphere of coal exit among the financial institutions. KBC said, "We will monitor whether institutional investors, who said they would not take over corporate bonds early last year as well as securities firms, will keep their words" and called once more on financial institutions to stop investing in coal and to act responsibly beyond mere words.