SK IE Technology (SKIET), a manufacturer of lithium-ion battery separators for secondary cells, is rapidly securing significant investment for the establishment of a global production base.
Recently, the company obtained substantial funding from the International Financial Corporation (IFC), an affiliate of the World Bank Group.
On May 24, SKIET held a signing ceremony for a Green Loan, securing a total of USD 300 million (approximately KRW 400 billion).
The event took place at the Fairmont Hotel in Yeouido, Seoul, and was attended by SKIET CEO Kim Cheol-jung and IFC’s Regional Vice President for Asia and the Pacific, Riccardo Puliti. Out of the total amount, USD 200 million was provided from IFC's own funds, with an additional USD 100 million obtained through participation from private banks.
As the world's largest development finance institution, IFC facilitated private sector investments and loans amounting to approximately USD 32.8 billion (KWD 43 trillion) for over 100 countries in the previous year.
The secured USD 300 million investment by SKIET is earmarked for the expansion of their lithium-ion battery separator (LiBS) production plant, which is currently under construction in Silesia Province, Poland. In 2021, SKIET established a subsidiary in Poland (SKBMP) and built the first LiBS production plant in Europe. Presently, Plant No. 1 is operational, and the construction of Plants No. 2 to 4 is underway.
The construction of these additional plants is scheduled for completion by 2024. Once finished, the production capacity of Plants No. 1 to 4 combined will be capable of producing 1.54 billion m2 of LiBS, making it the largest production capacity in Europe. This quantity is equivalent to the separator production capacity required for approximately 2.05 million electric vehicles (EVs).
SKIET currently operates separator production plants in South Korea, China, and Poland. Additionally, the company plans to enter the North American market, considering the US' Inflation Reduction Act (IRA). Leveraging the IFC loan as an opportunity, SKIET intends to secure the necessary funding for its expansion into the North American market, as well as the growth of its plants in Poland.
"It is highly significant that we have received official approval from the IFC under the World Bank, following a rigorous year-long process that involved document submissions and on-site inspections since last May," said Oh Taek-seung, Chief Financial Officer of SK IE Technology. "Building upon this foundation, we anticipate smoother access to additional funding from policy finance and private sources when the need arises in the future."
This marks the first instance of a Korean manufacturing company's overseas subsidiary receiving a Green Loan from IFC funding. The IFC anticipates that supporting the expansion of SKIET's EV battery separator production facility in Poland will contribute to meeting the escalating demand for EV batteries in Europe while aiding in the achievement of environmentally friendly goals, such as reducing carbon emissions in the transportation sector.
"The transition to Net Zero presents an unparalleled investment opportunity. According to IFC research, the demand for electric vehicle batteries in the EU alone is projected to increase from 30 GWh to 1,300 GWh by 2035. Our impactful partnership with SKIET will help address this rapidly growing demand by establishing a more resilient regional electric vehicle value chain." said Riccardo Puliti, IFC's Regional Vice President for Asia and the Pacific. "We are eager to collaborate with innovative Korean companies like SKIET to transfer technological know-how and scale up climate actions in emerging markets."
“SKIET has proactively established a supply system that quickly responds to customer needs, such as successfully establishing global production bases in Korea, China, and Europe,” said Kim Cheol-jung, CEO of SK IE Technology. “Based on the fundraising from IFC, we will be able to smoothly proceed with our entry into the global market in the future and continuously enhance our corporate value, while contributing to the development of the EV ecosystem in Europe.”
