SK Innovation raises $1 bn in green loans to finish second U.S. battery plant

[Photo provided by SK Innovation Co.]

South Korean battery-making major SK Innovation Co. will be able to speed up its $1.5 billion second electric battery project in the United States upon raising near $1 billion through a green loan facility.

The company said Wednesday that it will back the green loan agreement that its U.S. subsidiary SK Battery America (SKBA) will strike with a financial institution later this month.

Green loans are loan instruments available exclusively to environment-friendly businesses including EVs and renewables.

SK Innovation broke ground for its second U.S. battery plant in Georgia last year and hopes to start mass production at the new facility of annual 11.7 gigawatt-hour (GWh) capacity in 2023. Construction costs are estimated to be around $1.5 billion.

The company injected 894.4 billion won ($823 million) by recapitalizing SKBA for the initial investment last April.

SK Innovation was the first company in Korea to take out a green loan in 2019. The 800-billion-won loan had then been used to invest in its overseas manufacturing sites for EV batteries and separators.

Last year, another local battery maker LG Chem Ltd. signed a 700-billion-won green loan agreement to scale up its EV battery plant in Poland. Hyundai Heavy Industries Co. received 480 billion won in green loans to develop clean fuel vessel technologies.

SK Innovation’s first battery plant in Georgia, which boasts an annual capacity of 9.8GWh, will start pilot production in the first half of this year. It aims to go fully operational by the first quarter of 2022.

The company said it plans to stretch its annual capacity from 19.7GWh to 100GWh by 2025 to become one of the top three players in the world’s EV battery market.

SK Innovation claimed a 5.5 percent market share to rank No. 5 based on the global usage of EV batteries, with a battery usage of 5.6GWh in January-November 2020, according to energy market research firm SNE Research.

On Wednesday, shares of SK Innovation closed 5.33 percent higher at 257,000 won.

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