The financial authorities are fully launching an interagency cooperation system to expand the supply of climate finance and activate transition finance. As of July this year, climate finance supplied by five policy finance institutions totaled 42 trillion won.
The Financial Services Commission said on the 14th that it held the first meeting of the "climate finance activation task force (TF)" and discussed performance in promoting climate finance and interagency cooperation plans for the stable introduction of transition finance. Earlier, the Financial Services Commission, through measures to activate climate finance released in February, decided to supply a total of 790 trillion won in climate finance from 2026 to 2035.
As of July this year, climate finance supplied by five policy finance institutions—the Korea Development Bank, Export-Import Bank of Korea, Industrial Bank of Korea (IBK), Korea Credit Guarantee Fund (KODIT), and Korea Technology Finance Corporation (KOTEC)—totaled 42 trillion won. That amounts to 74.1% of the full-year target of 56.7 trillion won, and 127% compared to the cumulative target through July of 33.1 trillion won.
By institution, the Korea Development Bank led with 14.9 trillion won, followed by the Export-Import Bank of Korea at 12 trillion won, the Korea Credit Guarantee Fund (KODIT) at 7.8 trillion won, the Korea Technology Finance Corporation (KOTEC) at 4.3 trillion won, and the Industrial Bank of Korea (IBK) at 3 trillion won. All five institutions exceeded their cumulative targets through July. Policy finance institutions are supporting investments, loans, and guarantees in eco-friendly energy fields such as hydrogen, ammonia, and wind power, as well as corporations related to recycled raw materials and circular resources.
The Financial Services Commission will regularly review climate finance supply performance and identify exemplary support cases, while linking transition finance guidelines and climate finance information infrastructure to encourage financial companies to develop related products.
The government will also expand support for green and transition investments. The Ministry of Climate, Energy and Environment plans to support bond and loan interest costs and guarantees for investments that align with the Korea green taxonomy (K-taxonomy) and corporations' transition strategies.
In particular, it will expand interest subsidies on bonds for large-scale green projects and provide preferential rates on green and transition loans on a differentiated basis according to reduction effects. It will enhance interoperability with major countries' taxonomies, including the European Union (EU) and Singapore, and support corporations so they can voluntarily calculate and disclose K-taxonomy-eligible revenue and investment amounts.
The Ministry of Trade and Industry (MOTI) will draw up sector-specific carbon reduction road maps for five carbon-intensive industries—steel, petrochemicals, cement, refining, and electronics assembly—reflecting the 2035 national greenhouse gas reduction target (NDC). After collecting opinions from industry and experts, it will finalize the road maps and link them to transition finance supply standards.
Institutional improvements will also be pursued to enable the actual launch of transition finance products. The Financial Supervisory Service (FSS), after releasing transition finance guidelines in February, prepared a draft of practical best practices late last month. The FSS plans to finalize the best practices by the end of Oct. after gathering opinions from the financial sector and, based on them, support financial companies in launching pilot products. It will also review ways to link the Ministry of Trade and Industry (MOTI)'s sector-specific carbon reduction road maps with transition finance assessments by the end of this year.
The Financial Services Commission will regularly hold the climate finance activation TF to identify and address on-site challenges in the financial sector. It will also prepare legal and institutional foundations to activate climate finance and review ways to link sustainability disclosures with transition finance.