Position of the Korea EXIM Bank on the Allegation that the Bank’s support for the coal-fired electricity generations through its export-credit facility defies its GCF accreditation application 1.
KEXIM supported US$3.8 billion for coal-fired power generation between the year 2007 and 2014, accounting for 0.6% of the Bank’s total portfolio. However, the share of the industry in its entire energy sector portfolio is declining steadily accounting for 14.7% between the year 2011 and 2014 compared to 35.7% between the year 2007 and 2014. In particular, in 2015, KEXIM endorsed the OECD Sector Understanding on Export Credits for Coal-Fired Electricity Generation Projects, through which the Bank officially declared that in principle it would suspend its support for the industry from January 2017.
The Same Understanding document specifies that all the signing entities shall suspend its support for the industry through Officially Supported Export Credits but allows selective support for a range of high technologies related to the industry. The Bank is in full compliance with it.
2.
At the same time, KEXIM has been steadily increasing the proportion of its financial support for various projects and programmes tackling climate change-related challenges: By the end of 2015, the Bank has supported as much as US$26.2 billion (composed of US$ 23.3 billion, for private finance, and US$ 2.9 billion for public finance, respectively).
In particular, once accredited, KEXIM will deploy for its GCF-KEXIM co-financed projects the implementation modality of EDCF, KEXIM’s official development assistance (ODA) vehicle. Today climate change projects and programmes are the EDCF’s top priority area, with 25% of its total funding allocated to them (in terms of total amounts) with prime rate applications*. (* With 0% interest rates for solar PV, wind and bio-fuel-related projects and programmes)
Once accredited as a GCF implementing entity, KEXIM plans to substantially increase its climate change financing’s share in the EDCF operation.
Thank you very much. Yu Kwang-hoon Director of MDB co-financing Team Focal point for GCF Accreditation The Export-Import Bank of Korea khyu@koreaexim.go.kr