Korea Hydro and Nuclear Power (KHNP), South Korea’s largest electricity provider, has issued a HK$1.166 billion ($149 million) international green nuclear bond, marking the first such issuance in Asia. The proceeds will be allocated to research and development (R&D) projects aimed at enhancing the safety of nuclear power plants and advancing next-generation nuclear technologies. Crédit Agricole CIB acted as the Sole Dealer for the transaction.
The issuance represents a milestone in South Korea’s transition towards a sustainable energy future, reinforcing the role of nuclear power in the country’s energy strategy. Nuclear energy currently accounts for approximately 28% of South Korea’s electricity generation, with government plans to increase this share to 35% by 2036. As the nation’s sole nuclear power operator, KHNP is at the forefront of research initiatives to strengthen core technologies and safety measures in nuclear facilities.
Alongside the bond issuance, KHNP has updated its green bond framework, setting eligibility criteria for nuclear R&D projects in alignment with the Korean Green Taxonomy (K-Taxonomy) and the EU Taxonomy. A dedicated Nuclear Bond Register has been introduced to ensure transparency and traceability of funds. KHNP has also committed to publishing an annual progress report and securing independent external verification of the allocation and impact of proceeds until full disbursement is achieved.
The green bond framework received a second-party opinion (SPO) from Moody’s Investor Service, attaining an ‘SQS1 (Excellent)’ rating—the highest sustainability quality score under Moody’s SPO methodology. This marks the first nuclear-related green bond framework to achieve this recognition, a distinction attained by only 9% of issuers globally.
This pioneering issuance has attracted capital from forward-thinking investors, both locally and internationally. Investors were drawn to the way this financing approach is enhancing access to sustainable energy and the precedent it sets for future opportunities. “We were delighted to support KHNP in securing the necessary funding to expand their production capacity and accelerate the energy transition,” said Sungmin Joh, Head of Debt Capital Markets for South Korea.
“This innovative framework establishes a new benchmark for future renewable energy bond issuances. We believe that setting this precedent will inspire more participants in the region to adopt creative yet transparent strategies to improve energy accessibility, reliability, and affordability,” said Carmen Tsang, Head of Sustainable Investment Banking for Greater China.
