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LG Innotek secures $200 million loan from International Finance Corporation

Published: 24 Sep. 2025, 13:07 Updated: 24 Sep. 2025, 17:43

YOON SO-YEON
[email protected]

Park Ji-hwan, chief financial officer of LG Innotek at right, and Carsten Mueller, director of manufacturing, agribusiness and services Asia at the International Finance Corporation (IFC), pose for photos after signing a deal to grant LG Innotek the IFC's Sustainability Linked Loan (SLL) in Gangseo District, western Seoul. [LG INNOTEK]

LG Innotek has secured a $200 million loan from the International Finance Corporation (IFC) after being recognized for its "top-tier" environmental, social and governance (ESG) management, the LG Electronics subsidiary said Wednesday.

LG Innotek applied for IFC's sustainability-linked loan (SLL) last year to use as funding for expanding the company's manufacturing plants in Hai Phong in Vietnam. The loan has a maturity of eight years.

The IFC, a member of the World Bank Group, supports private-sector investment in developing countries. This marks the first time a Korean company has received IFC's SLL, which was first introduced in 2017 as an instrument aimed at encouraging ESG adoption in the corporate sector. Companies with stronger ESG and compliance metrics benefit from lower interest rates.

Approval for the SLL is more stringent and loan management is subject to tighter oversight because unlike the green loan, which must only be used for ESG-related businesses, the SLL grant is much more flexible in how the fund can be used. However, companies must meet ESG performance goals agreed upon in advance to maintain the interest benefits over the term of the loan.

In 2022, LG Innotek announced its so-called RE100 initiative to turn all of its energy to renewable energy sourced by 2030 and achieve carbon neutrality by 2040. The company converted 638 gigawatt-hours of electricity — nearly 60 percent of total usage across domestic and overseas facilities — to renewable energy last year, the highest among Korean companies participating in the RE100 initiative except for the Korea Water Resources Corporation. LG Innotek facilities in Paju, Gumi 1A and Vietnam already achieved RE100 last year, according to the company.

"The funding secured from the IFC is a meaningful financial achievement driven by the company’s sincere ESG efforts," said Park Ji-hwan, chief financial officer of LG Innotek. "LG Innotek will continue to lead in ESG and grow as a company that delivers differentiated value to customers."

“We are delighted that IFC’s first SLL with a Korean company is with LG Innotek," said Carsten Mueller, IFC’s Regional Industry Director for Manufacturing, Agribusiness & Services in Asia and the Pacific. "IFC will continue to work closely with LG Innotek to advance sustainability through various forms of collaboration.”

BY YOON SO-YEON [[email protected]]