SKIET grabs $300 million green loan from IFC

Kim Chul-jung, chief executive officer of SKIET, and Riccardo Puliti, the IFC’s regional vice president for Asia and the Pacific, pose for a photo after signing a green loan agreement at the Fairmont Hotel in Seoul on May 24. [Photo provided by SKIET]

SK ie technology Co. (SKIET), a leading producer of battery separators in South Korea, has secured a substantial investment from the International Finance Corp. (IFC), an arm of the World Bank Group, to support its global production expansion.

The investment was announced on Wednesday at the Fairmont Hotel in Seoul during a signing ceremony attended by Kim Chul-jung, chief executive officer of SKIET, and Riccardo Puliti, the IFC’s regional vice president for Asia and the Pacific.

During the ceremony, SKIET signed a green loan agreement worth $300 million. Green loans are specifically designated for environmentally-friendly purposes. In this case, $200 million comes from the IFC’s own funds, while $100 million is sourced from commercial lenders.

The IFC, the largest global development finance institution specializing in private sector investments, provided over $32.8 billion in private investments and loans across more than 100 countries last year.

The $300 million secured by SKIET will be used as capex for the expansion of its lithium-ion battery separator (LiBS) production facility in Silesia, Poland. SKIET established its Polish subsidiary, SK hi-tech battery materials Poland (SKBMP) and has been operating the first LiBS production plant in Europe since 2021. The company is currently in the process of expanding its second to fourth plants and aims to complete the constructions by 2024.

Once the expansion is completed, the combined capacity of the four plants in Poland will enable SKIET to produce about 1.54 billion square meters of separators annually, making it the largest in Europe. This capacity is sufficient to support the production of around 2.05 million electric vehicles per year.

SKIET currently operates separator plants in South Korea, China and Poland, and is considering entering the North American market for potential benefits under the Inflation Reduction Act (IRA). With the IFC loan, the company plans to secure the necessary funds for future investments in North America without any disruptions.

This is the first time the IFC’s green loan has been extended to a foreign subsidiary of a Korean manufacturing company, according to SKIET.

According to the IFC’s research, the demand for EV batteries is expected to rise from the current 30 gigawatt-hours (GWh) to 1,300 GWh by 2035 within the European Union (EU).