SK Engineering & Construction (SK E&C) has recently decided to create a corporate partnership (COPA) fund with a private equity fund (PEF) company to invest in overseas ESG projects.
The builder has sent requests for bidding proposals (RFPs) to several PEF management companies. The size of the fund is estimated at 300 billion won. It is the first time for a Korean builder to establish a COPA fund for overseas ESG investments.
IB industry analysts predict that SK E&C will use the funds to acquire environmental assets such as landfills and incineration facilities in Vietnam.
The company has recently registered a renewable energy project in Vietnam as a greenhouse gas emissions reduction programme of activities (PoA) under the United Nations Framework Convention on Climate Change (UNFCCC) to obtain carbon emission rights. The company may take over renewable energy companies such as solar and wind power in Vietnam in this process.
SK E&C is pushing for various new businesses in Korea related to renewable energy, liquefied natural gas (LNG) power generation and upgrading of old oil refining and power generation facilities. It is actively building a cooperative relationship with Korea Hydro & Nuclear Power.
The two companies have signed a business development and technology cooperation deal in offshore wind power, solar power and hydrogen fuel cells.
As SK Group has embraced ESG management, SK E&C is active in issuing ESG bonds. In February, it decided to issue 150 billion won in ESG bonds. As subscriptions amounted to about 1.21 trillion won, the company chose to issue 300 billion won worth of ESG bonds.