SK Innovation announced on Jan. 6 that it will procure 1 trillion won through 'Green Bond' method to build a battery plant in the U.S.
SK Innovation held a board meeting last month and decided to guarantee the process of issuing green bonds worth 1.09 trillion won (about $986 million) in the U.S.
Green Bond can be recognized for its business eco-friendliness through financial institutions' certification with limited use in eco-friendly fields such as electric vehicles and renewable energy, and in this case, it can be financed under favorable conditions.
SK Battery America (SKBA), a U.S. electric vehicle battery subsidiary of SK Innovation, has signed a green loan contract worth 1 trillion won with a financial institution and SK Innovation has a debt guarantee. The green bond contract is scheduled to take place this month.
SK Innovation invested 894.4 billion won in its second U.S. battery plant in April last year by purchasing SKBA shares. It is heard that this green bond contract will cover the remaining 1 trillion won worth of construction costs.
The funds raised by Green Bond will be used to build a second plant for electric vehicle batteries in Georgia. Construction of the 11.7 GWh second plant, which started last year, is planned to mass-produce in 2023. Construction costs are estimated to total $1.5 billion.
SK Innovation explained, "The successful procurement of Green Bond is that SK Innovation's battery business has been recognized for its value and growth as an eco-friendly future business."
Meanwhile, SK Innovation aims to expand its annual production capacity to 100 GWh by 2025, based on its 1st and 2nd plants in the U.S., and become one of the top three in the global electric vehicle battery market.
