Senate Passes Bipartisan Budget Deal Rolling Back $63 Billion in Cuts
South Korea’s Renewables Fund to Spur Investments, Official Says
A $97 million-guarantee fund raised by power generators, energy distributors and banks will spur South Korean companies to invest in clean-energy, an industry official said.
The fund, managed by the Korea Credit Guarantee Fund and the Korea Technology Finance Corp., could provide as much as 1.24 trillion won ($1.16 billion) in guarantees to small renewable-energy companies, Park Jeong Tae, team manager of overseas business support center of the Korea New & Renewable Energy Association that is involved in operations of the guarantee fund, said in a phone interview yesterday.
“The guarantee fund will help spur investments in the country’s renewable-energy industry, which is in a growth stage,” Park said. “The investments will benefit small companies as well as large companies which have them as suppliers.”
South Korea’s government aims to bolster its share in the world’s solar and wind power equipment markets to 15 percent each by 2015. It had a 11 percent share of the world solar market and 4 percent of the wind market in 2010, according to government data.
Companies that invest in clean-energy will have a ready domestic market as the government plans to introduce in 2012 a compulsory 2 percent quota of renewable energy that the country’s 14 power generators will be required to derive, Park said. The renewable portfolio standard, or RPS, will be raised to 10 percent by 2022. It will create demand for renewable- energy equal to 4.1 trillion won in 2012 and 54 trillion won by 2020, according to government estimates.
A total of 215 companies are involved in the country’s renewable energy industry, hiring 13,380 employees and posting 8.13 trillion won of sales in 2010, the Knowledge Economy Ministry said in February.
Applicants for the guarantee funds will be restricted to small-sized companies involved in solar power, and other renewable energy businesses as manufacturers or power generators, he said.
The association, on behalf of the contributors, receives applications, and an eight-member recommendation committee will create a shortlist and propose them to the country’s two specialized guarantor organizations, said Park, a member of the recommendation committee. The fund can provide guarantees equivalent to 12 times its face value, he said.
Successful applicants will get five-year guarantees on as much as 10 billion won in loans, and pay lower fees and interest rates, he said.
Korea Electric Power Corp. (KEP), the country’s monopoly power distributor, is among the contributors to the guarantee fund. Others include the country’s top two refiners, GS Caltex Corp. and SK Energy Co., OCI Co., its biggest polysilicon maker, Doosan Heavy Industries & Construction Co. and Posco Power Corp.
To contact the reporter on this story: Sangim Han in Seoul at firstname.lastname@example.org
To contact the editor responsible for this story: Amit Prakash at email@example.com