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    KOGAS 2020 Sustainability Bond Annual Report

    Uploaded by

    Vinaya Naralasetty
    KOGAS issued its inaugural US$500 million sustainability bond in July 2019 to fund projects in renewable energy, low carbon transport, green buildings, job creation, and supporting underprivileged groups. As of 2019, 13.2% of proceeds have been allocated, primarily to funding SMEs and improving energy efficiency for low-income households. Proceeds are also funding the expansion of Korea's hydrogen infrastructure to support fuel cell vehicles and establish a hydrogen economy. A case study highlights KOGAS' plans to invest in hydrogen production facilities and pipelines through 2030.

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    KOGAS 2020 Sustainability Bond Annual Report

    Uploaded by

    Vinaya Naralasetty
    220 views4 pages
    KOGAS issued its inaugural US$500 million sustainability bond in July 2019 to fund projects in renewable energy, low carbon transport, green buildings, job creation, and supporting underprivileged groups. As of 2019, 13.2% of proceeds have been allocated, primarily to funding SMEs and improving energy efficiency for low-income households. Proceeds are also funding the expansion of Korea's hydrogen infrastructure to support fuel cell vehicles and establish a hydrogen economy. A case study highlights KOGAS' plans to invest in hydrogen production facilities and pipelines through 2030.

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    KOGAS issued its inaugural US$500 million sustainability bond in July 2019 to fund projects in renewable energy, low carbon transport, green buildings, job creation, and supporting underprivileged groups. As of 2019, 13.2% of proceeds have been allocated, primarily to funding SMEs and improving energy efficiency for low-income households. Proceeds are also funding the expansion of Korea's hydrogen infrastructure to support fuel cell vehicles and establish a hydrogen economy. A case study highlights KOGAS' plans to invest in hydrogen production facilities and pipelines through 2030.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    220 views4 pages

    KOGAS 2020 Sustainability Bond Annual Report

    Uploaded by

    Vinaya Naralasetty
    KOGAS issued its inaugural US$500 million sustainability bond in July 2019 to fund projects in renewable energy, low carbon transport, green buildings, job creation, and supporting underprivileged groups. As of 2019, 13.2% of proceeds have been allocated, primarily to funding SMEs and improving energy efficiency for low-income households. Proceeds are also funding the expansion of Korea's hydrogen infrastructure to support fuel cell vehicles and establish a hydrogen economy. A case study highlights KOGAS' plans to invest in hydrogen production facilities and pipelines through 2030.

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    Sustainability Bonds

    2020 Annual Report


    Sustainability Bonds Issuances

    Inaugural
    Inaugural Issuances
    Issuances of
    of Sustainability
    Sustainability Bonds
    Bonds

    · As Korea’s largest natural gas supplier, Kore Gas Corporation (“KOGAS”) is responsible for minimizing the impact of global
    climate change and ecological footprint through safe and stable supply of natural gases. KOGAS’ funding through
    Sustainability Bond is to fulfill its economic, environmental and social responsibilities
    · In July 2019, KOGAS issued its inaugural US Dollar (“USD”) denominated Sustainability Bond, in the amount of US$500mm
    with 10-year tenor
    · The net proceeds of the bond will be used in line with Eligible Project Categories under KOGAS’ Sustainability Bond
    Framework
     Eligible Project Categories
    – Renewable Energy
    – Low Carbon Transport
    – Green Building
    – Job Creation in Local SMEs
    – Support Underprivileged Target Group
    · Summary Terms of Sustainability Bond

    Items KOGAS Sustainability Bond

    Issue Date July 9, 2019

    Offering Size US$500mm

    Tenor 10-Year

    Format 144A / Reg S

    Maturity Date Jul 16, 2029

    Benchmark Spread CT10+ 92.5 bps

    Coupon 2.875%

    Listing Singapore Exchange (“SGX”)

    Net proceeds will be allocated to finance and/or refinance, in whole or in part, new and/or
    Use of Proceeds existing projects from Eligible Project Categories in accordance with Korea Gas
    Corporation’s Sustainability Bond Framework

    Management
    Management of
    of Proceeds
    Proceeds

    · The net proceeds of each Sustainability Bond will be deposited in KOGAS’ Treasury Portfolio. An amount equivalent to the net
    proceeds shall be allocated for the financing and/or refinancing of existing or new eligible projects. KOGAS’ treasury team will
    track the net proceeds through its internal counting system

    · Pending full allocation of the net proceeds, all or a portion of the net proceeds may be used for the payment of all or a portion
    of outstanding indebtedness, temporary investment in cash, cash equivalents, investment grade securities or other
    marketable securities, short-term instruments or other capital management activities

    2
    Allocation and Impact Report

    Allocation
    Allocation of
    of Net
    Net Proceeds
    Proceeds from
    from Sustainability
    Sustainability Bond
    Bond

    · Net Proceeds of Sustainability Bond: US$494,125,000


    · Amount of net proceeds allocated: US$65.3mm (Approximately 13.2%)
    · Breakdown between new financing and refinancing

    – New financing: US$16.4mm (25.1%)

    – Refinancing: US$48.9mm (74.9%)

    Allocation by Green and Social Categories


    Total Portion
    Eligible Project Categories
    (in 1,000 US$) (%)

    Green 5,404 8.3%


    Social 59,930 91.7%
    Total 65,334 100%

    Allocation by Key Projects


    New Financing Refinancing Total Portion
    Eligible Category Projects
    (in 1,000 US$) (in 1,000 US$) (in 1,000 US$) (%)

    Low Carbon Transport Hydrogen fuel infrastructure 5,404 - 5,404 8.3%

    “Shared Growth Fund” – Fund


    used for nurturing SMEs and
    Job Creation in SMEs 8,235 45,902 54,137 82.8%
    creating jobs within the natural
    gas industry value chain

    “Onnuri-Project” – Project to
    Support Underprivileged improve heating efficiency(1) and
    2,745 3,048 5,793 8.9%
    Target Group provide medical / education
    programs for target group

    Total 16,384 48,950 65,334 100%

    Selected
    Selected Impact
    Impact Indicators
    Indicators

    Eligible Category Projects 2016 2017 2018 2019

    Number of SMEs financed 71 296 387 481


    Job Creation in SMEs
    Number of jobs created - 20,583 15,226 14,688

    Support Underprivileged Number of households


    1,039 1,163 1,266 1,359
    Target Group supported

    Note: (1) Improving efficiency by replacing and repairing floor heating units, flooring, wall insulation, windows, and wallpaper of low-income
    underprivileged households and social welfare facilities

    3
    Case Study

    Hydrogen
    Hydrogen Economy
    Economy Roadmap
    Roadmap(1)
    (1)

    · Hydrogen has attracted attention as a new energy source given its minimal environmental impacts. In 2018, the Korean
    government announced a roadmap for ‘Hydrogen Economy’ to lead global Hydrogen Economy development as one of
    Korea’s new growth areas
    · In April 2019, KOGAS announced its plan to establish hydrogen production and distribution network to vitalize Korea’s
    ‘Hydrogen Economy’. Under the plan, KOGAS will construct 25 hydrogen-producing facilities and pipelines totaling 700
    kilometers by 2030. KOGAS expects to supply 1.73 million tons of hydrogen by 2030, and supply over 60% of national
    hydrogen demand by 2040
    · KOGAS plans to spend KRW4.7tn to establish production, supply and import facilities by 2030

    1st Phase (~2022) 2nd Phase (~2025) 3rd Phase (~2030)


    Pipeline: 100km Pipeline: 600km Pipeline: 700km

    Hydrogen production base

    Hydrogen pipeline

    KOGAS’ Targets
    By 2022 By 2030

    # of Production Facility 9 25

    # of Overseas Production Unit - 1

    Supply Pipeline 100km 700km

    # of Charging Station 100 110

    # of T/T 140 500

    Green
    Green Building
    Building(2)
    (2)

    · KOGAS Talent Development Center in Gyeryong City, Korea


    · Expected Completion Date: August 2022
    · Size: 15,608m2
    · Preliminary Local Green Building Ratings
    – Green Building Certification: G-SEED 2 (Expected)
    – Energy Efficiency Rating: 1++ (Expected)
    – Zero Energy Building: Level 5 (Expected)
    – Intelligent Smart Building Rating: Level 5 (Expected)

    Note: (1) Roadmap as of December 2019 and subject to change


    4 (2) Completion date and size may change as construction progresses

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