Strategies for Introducing Green CLOs to Enhance Green Financing [BOK Issue Note 2024-21]

구분
Business·Industry
등록일
2025.01.20
조회수
1426
키워드
기후변화 climate change Climate Change
등록자
Sanghun Park, Jeayoon Kim, Jeongmin Bae, Gibong Ryu
담당부서
Sustainable Growth Research Team(02-750-6833)
① Although pressure is increasing for small and medium-sized enterprises (SMEs), especially exporting companies, to reform their production structures and transition to a low-carbon economy due to impending international regulations, raising long-term funds for greenhouse gas (GHG) emissions reduction is more challenging for SMEs than large enterprises. Against this background, this paper examines the framework for the issuance of green collateralized loan obligations (Green CLOs) to enable SMEs to raise the long-term funds they need for investment in low-carbon production facilities at a lower cost through a loan system linked to the capital market.


② The Green CLOs proposed in this paper are based on the issuance of asset-backed securities by special-purpose companies (SPCs), using green loans extended by banks to SMEs as underlying assets. By leveraging the loan-screening networks of banks to select numerous small green loans, and without requiring large-scale fiscal support such as interest subsidies, this scheme is expected to have greater scalability than existing asset-backed securitization programs.


③ However, to ensure the effective operation of Green CLOs, it is essential to prepare green loan classification standards prior to the implementation of a “Administrative Guidelines on Green Finance” and simplify the green certification procedure to reduce overlapping certification costs for loan extension and bond issuance. Additionally, providing further incentives such as tax benefits for companies and banks and financial support for credit enhancement in the early phase of issuance, appears necessary.


④ Considering the incentives for companies to use green loans and banks to provide such loans, the reduction of funding costs through securitization, and the demand for investment in green bonds, the introduction of a Green CLO scheme is judged to be useful as a means of raising funds with which SMEs can transition to eco-friendliness.


⑤ Furthermore, the introduction of Green CLOs is expected to provide a new green investment vehicle in the Korean capital market as well as long-term investment funds to SMEs. This will contribute to enhancing the international community’s perception of Korean green financing.

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