Crédit Agricole CIB Supports Korea Hydro’s Green Nuclear Bond
South Korea’s KHNP Issues Asia’s First Green Nuclear Bond
Table of Contents
- South Korea’s KHNP Issues Asia’s First Green Nuclear Bond
- South Korea’s KHNP Green Nuclear Bond: Your Questions Answered
- What is a Green Nuclear Bond?
- What is KHNP and its role in South Korea’s Energy Sector?
- how will the proceeds from the Green Nuclear bond be used?
- What role did Crédit Agricole CIB play in this transaction?
- How does the Green Bond Framework align with sustainability standards?
- What is moody’s Investor service’s opinion on KHNP’s Green bond Framework?
- South Korea’s Energy Mix: Why Nuclear?
- Key Takeaways: KHNP Green Bond
Published: 2025-03-05
Landmark Green Nuclear Bond Issued by KHNP
On March 5, 2025, Korea Hydro and Nuclear Power (KHNP), South Korea’s largest electric power company, achieved a significant milestone by issuing a HK$1.166 billion international green nuclear bond. This is teh first bond of its kind in Asia, marking a pivotal moment for lasting finance in the region. Crédit Agricole CIB played a crucial role, acting as the Sole Dealer for this landmark transaction.
The proceeds from this green nuclear bond are earmarked for research and advancement (R&D) investments. These investments will focus on enhancing the safety of existing nuclear power plants and fostering the development of next-generation nuclear technologies.
Crédit Agricole CIB’s role in Sustainable Finance
This transaction highlights South Korea’s commitment to a sustainable energy future and underscores crédit Agricole CIB’s expertise in mobilizing sustainable capital for nuclear energy projects. Crédit agricole CIB has a history of supporting similar initiatives. The company played a pivotal role in EDF’s first euro green bond, where proceeds financed nuclear capital expenditures. They also served as the Sole Green Structuring agent for the United States’ inaugural corporate green bond for Constellation, which can be utilized to finance nuclear projects.
Ensuring access to affordable, reliable, sustainable, and modern energy is one of the core objectives of the 17 United Nations Sustainable Development Goals (SDGs). Nuclear power is a critical component of Korea’s sustainable energy grid, currently contributing approximately 28% of the country’s total electricity generation. The government plans to increase this proportion to 35% by 2036. As South Korea’s sole nuclear generation company, KHNP is essential in achieving this goal through continuous R&D efforts aimed at strengthening core technologies and safety capabilities in nuclear power plants.
KHNP’s Updated Green Bond Framework
In conjunction with the issuance, Crédit Agricole CIB supported KHNP in updating its green bond framework. This framework outlines the eligibility criteria for nuclear R&D projects,referencing technical thresholds for nuclear economies activities defined in both the Korean Green Taxonomy (K-Taxonomy),published by the Ministry of Habitat,and the EU Taxonomy.
To ensure transparency and accountability, a separate Nuclear Bond Register has been created. This register will track the proceeds of green nuclear bond issuances, ensuring full traceability and distinction from other green bond issuances. KHNP is committed to publishing an annual progress report post-issuance and will seek autonomous external verification of the allocation of proceeds and their impacts until full allocation is achieved.
Moody’s Investor Service’s Positive Opinion
KHNP’s green bond framework received a positive second-party opinion (SPO) from Moody’s Investor Service, attaining a ‘SQS1 (Excellent)’ score. This is the highest possible sustainability quality rating in Moody’s SPO methodology. To date, onyl about 9% of issuers worldwide have achieved a SQS1 rating, making this the first framework with nuclear power-related use of proceeds to receive such recognition.
Additional resources
for more information about the KHNP Green Bond Framework (2024), visit KHNP’s corporate website.
South Korea’s KHNP Green Nuclear Bond: Your Questions Answered
On March 5, 2025, Korea Hydro & Nuclear Power (KHNP) made headlines by issuing Asia’s first green bond to fund nuclear energy projects.This Q&A article dives into the details of this landmark transaction, exploring its implications for sustainable finance and the future of nuclear energy in South Korea.
What is a Green Nuclear Bond?
A green nuclear bond is a type of green bond where the proceeds are specifically used to finance nuclear energy projects that meet certain environmental and sustainability criteria. These bonds adhere to the Green Bond Principles (GBP),meaning the funds are dedicated to projects with environmental benefits.
why is KHNP’s Green Bond significant?
KHNP’s green bond is significant as:
It is indeed the first of its kind in Asia, setting a precedent for other countries to follow.
It demonstrates South Korea’s commitment to a sustainable energy future.
It recognizes nuclear energy as a potential contributor to achieving climate goals under specific circumstances.
What are Green Bond Principles (GBP)?
The Green Bond Principles (GBP) are voluntary guidelines that recommend transparency and disclosure and promote integrity in the Green Bond market by clarifying the approach for issuance of a Green Bond.
What is KHNP and its role in South Korea’s Energy Sector?
Korea Hydro & Nuclear Power Co., Ltd (KHNP) is South Korea’s largest electric power company and the country’s sole nuclear power generation company.KHNP plays a vital role in South Korea’s energy mix.
What is KHNP’s strategic Importance?
Major Electricity Provider: KHNP accounts for a large percentage of South Korea’s electricity generation
Nuclear Energy Leadership: As the sole nuclear generation company, KHNP is crucial for maintaining and developing nuclear power infrastructure.
Sustainable Energy goals: KHNP is essential in helping South Korea achieve its goals for increasing the contribution of nuclear energy to the national grid aiming for 35% by 2036.
how will the proceeds from the Green Nuclear bond be used?
The proceeds from KHNP’s green nuclear bond,which totals HK$1.166 billion,are specifically earmarked for research and advancement (R&D) investments.
What specific R&D areas will be funded?
Enhancing safety: Improving safety measures at existing nuclear power plants to mitigate risks.
Next-Generation Technologies: Developing advanced nuclear technologies that are safer,more efficient,and more sustainable.
What role did Crédit Agricole CIB play in this transaction?
Crédit Agricole CIB played a crucial role in this green bond issuance.
What were Crédit Agricole CIB responsibilites?
Sole Dealer: Acted as the sole dealer for the HK$1.166 billion international green nuclear bond,managing the transaction’s execution.
Framework Update: Supported KHNP in updating its green bond framework to meet international standards and reflect the inclusion of nuclear R&D projects.
sustainable Finance Expertise: Leveraged its experience in sustainable finance to facilitate this landmark transaction.
How does the Green Bond Framework align with sustainability standards?
KHNP updated its green bond framework to align with established sustainability standards.
What standards are referenced in the framework?
korean Green Taxonomy (K-Taxonomy): Published by the Ministry of Habitat, it defines technical thresholds for nuclear economic activities in South Korea.
EU Taxonomy: The framework considers the EU Taxonomy’s technical screening criteria for nuclear activities.
What measures ensure Transparency and Accountability?
nuclear Bond Register: A separate register tracks the proceeds of green nuclear bond issuances.
Annual Progress Reports: KHNP commits to publishing annual reports detailing the allocation of proceeds.
External Verification: KHNP seeks self-reliant external verification of the allocation of proceeds and their environmental impacts.
What is moody’s Investor service’s opinion on KHNP’s Green bond Framework?
Moody’s Investor Service provided a notably positive second-party opinion (SPO) on KHNP’s green bond framework.
What was KHNP’s rating?
‘SQS1 (Excellent)’ Score:KHNP achieved the highest possible sustainability quality rating in moody’s SPO methodology.
How significant is this rating?
Elite Status: Only approximately 9% of issuers worldwide have attained an SQS1 rating from Moody’s.
First for Nuclear: This the first framework with nuclear power-related use of proceeds to receive such recognition.
South Korea’s Energy Mix: Why Nuclear?
Nuclear power is a critical component of south Korea’s energy strategy.
How much does Nuclear Contribute?
Current Contribution: Approximately 28% of South Korea’s total electricity generation comes from nuclear power.
Planned Increase: The government aims to increase this proportion to 35% by 2036.
How does this support united Nations Sustainable Development Goals (SDGs)?
Nuclear energy contributes to ensuring access to affordable, reliable, sustainable, and modern energy, aligning with the UN’s SDGs.
Key Takeaways: KHNP Green Bond
| Feature | Details |
| ———————— | ———————————————————————————————————————————————————————————————————————————————————————————————————————————– |
| Issuer | Korea hydro & Nuclear Power Co. Ltd. (KHNP) |
| Bond Type | Green nuclear Bond |
| Amount | HK$1.166 billion |
| Purpose | Funding research enhancement and advancement (R&D) focusing on enhancing the safety of existing nuclear power plants and fostering the development of next-generation nuclear technologies. |
| Framework Alignment | Aligned with Green Bond Principles (GBP); References Korean Green Taxonomy (K-Taxonomy) and EU Taxonomy. |
| **External Verification