LG Chem will be backed by South Korea’s state lenders with $5 billion in policy loans to finance its expansion in secondary battery factories across the world over the next five years as a part of the government push to promote battery business.
LG Chem signed an agreement with Korea Development Bank, Export-Import Bank of Korea, and Nonghyup Bank to scale up secondary battery industry, according to the Financial Services Commission on Monday.
Under the agreement, the three lenders will pool total finance of $5 billion to back LG Chem’s battery manufacturing expansion across the world from 2020 to 2024. Also, the banks and the battery maker will create a fund worth 150 billion won ($126 million), which will be used to provide financing to small and medium-sized players as well as collaborate on industry-related research projects.
The Korean government in September organized a team of financial institutions to help local electronics parts and materials makers grow stronger. LG Chem has become the first beneficiary.
Last week, LG Chem announced that the company and General Motors Co will invest $2.3 billion to build an electric vehicle battery cell joint venture plant in Ohio, which will be one of the world’s largest battery facilities.
Earlier in June, the Korean battery maker entered into another joint venture agreement with China’s top automotive group Geely in the electric car battery business, with each contributing $87.2 million.