Financial investors are increasingly shunning South Korea’s coal power companies due to the growing adoption of environmental, social, and governance (ESG) standards in investment.
Brokerage companies are now reluctant to manage the sale of bonds issued by carbon emitters due to the strengthening of ESG investments.
The country's biggest fund managers Hanwha, KB Asset Management, and Shinhan BNP Paribas will all stop funding the coal industry.
The National Pension Service (NPS), South Korea’s biggest institutional investor, has excluded some of the new coal-fired power development projects at home and abroad from its portfolio.
The pension fund is excluding investments in industries or companies with low ratings on ESG standards, which could impair the financing of firms like Korea Electric Power Corp. (KEPCO), steelmaker POSCO and petrochemical companies.
On June 18, Samcheok Blue Power Co. failed to attract any institutional investor for its 100 billion won corporate bond issue.
Consequently, the planned bond issue will be taken over by the coal power company’s bond sale managers, including NH Investment & Securities Co.
The local credit rating agencies downgraded their outlook for Samcheok's 3-year AA-minus-rated bonds from stable to negative, which reflects unfavorable market views on coal-related businesses.
Other coal power companies such as Gangneung Eco Power Co., Goseong Green Power Co., and GS Donghae Electric Power Co. also faced similar downgrades in their credit outlook.


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