JPMorgan Plans $1 Billion Green Funds in South Korea
June 17, 2009 (Bloomberg) -- JPMorgan Asset Management will set up funds of more than $1 billion to invest in South Korea’s alternative energy industry, making it the first foreign company to participate in the country’s go-green initiative. A letter of intent to create the so-called Korea Green Funds was signed by Knowledge Economy Minister Lee Youn Ho and JPMorgan Chase & Co. Vice Chairman William Daley in Washington, the South Korean government said today. The New York-based fund management company oversees $1.1 trillion of global assets. Asia’s fourth-largest economy is developing green technologies and boosting energy efficiency to cut reliance on fossil fuels, reduce greenhouse-gas emissions and diversify its exports. South Korea will invest 4.2 trillion won ($3.4 billion) by 2013 to make products including personal computers and television sets that use less power and emit less carbon dioxide. “The decision of JPMorgan may spur more investment by other global financial groups in the nation’s green business, easing some concerns over funding of renewable energy projects,” Choo Yeon Hwan, an analyst at Daewoo Securities Co., said by telephone in Seoul. LG Chem Ltd., the country’s chemicals maker, has started building a plant that will produce batteries for General Motors Corp.’s electric cars, while LG Display Co. plans to invest 50 billion won to develop solar cells. Chicago Climate Exchange Inc., a unit of the U.K.’s Climate Exchange Plc, is seeking a role in a proposed emissions-trading market in South Korea. JPMorgan will either contribute as much as 40 percent of the funds’ investment or seek overseas investors, while the remaining sum will be raised in South Korea, the Ministry of Knowledge Economy and Presidential Office said in statements. Foreign Investment “Developments in clean energy may initially be costly,” Asian Development Bank President Haruhiko Kuroda told reporters in Manila today. The bank will double its budget for cutting carbon emissions in the region to $2 billion by 2013, he said. ADB’s clean energy investments include wind power projects in China and India, a biomass power plant in Thailand, and hydropower projects in Bhutan, China and Vietnam. JPMorgan is likely to invest in renewable energy, including solar and wind power, carbon credit-trading, green cars and biofuels, the presidential office said. South Korea will attract more foreign investment in its green industries after the JPMorgan deal, the Knowledge Economy ministry said. The government is planning new “growth engines” including alternative energy to help diversify exports, which comprise mainly semiconductors, mobile phones and automobiles. Samsung Heavy Industries Co., the world’s second-largest shipyard, plans to make wind turbines in a market estimated at $74 billion by 2020 to counter a slump in vessel orders. The government said last month it is enlarging cash incentives to attract foreign funds into industries including alternative energy, robot technology and health-care services. South Korea’s $929 billion economy grew 0.1 percent in the first quarter compared with the previous three months, when it contracted 5.1 percent http://www.bloomberg.com/apps/news?pid=20602099&sid=aGbsso37iFbQ
