[Provided by the Ulsan Metropolitan City]
South Korea’s oil refiner SK Energy is offering at least 300 billion won ($251.3 million) in green bonds at the end of this month to strengthen its eco-friendly business.
SK Energy announced Monday that it will hold a book building session on September 18 to issue the debt on September 26. Depending on demand, the offering can go up to 500 billion won.
SK Energy will become the nation’s first manufacturer to issue green bonds, a bond whose proceeds must be used to fund environmentally-friendly business projects such as renewable energy and anti-pollution projects. The oil refiner said it decided to issue the bond to make contribution to environment and society in line with strong demand from environment-conscious investors worldwide and stricter regulations from the international organizations.
The company said it will use the proceeds to establish a vacuum residue desulfurization (VRDS) facility, a system that converts vacuum residues to cleaner low-sulfur fuels, at its Ulsan manufacturing complex. The low-sulfur fuels produce less greenhouse gas emissions, resulting in reducing air pollution.
The demand for low-sulfur oil is expected to soar starting next year because the International Maritime Organization (IMO)’s new regulation that requires marine fuels to contain less than 0.5 percent sulfur by weight, down from the current 3.5 percent, will take effect in 2020. Every ocean-going vessel should use low-sulfur fuels or install a facility that reduces sulfur level.
Amid group-wide efforts to contribute to environment, SK Energy’s holding company SK Innovation last month also raised 800 billion won in green lending, a corporate financing scheme that offers a lower lending rate to a firm investing in eco-friendly businesses. The company said it will use the proceeds to build plants for electric vehicle batteries and lithium-ion battery separators overseas.
By Han Ye-kyung and Choi Mira
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]