IFC plans $200 mln loan to LG Innotek Vietnam

The International Finance Corporation (IFC), the private sector arm of the World Bank Group, plans to make a sustainability-linked loan (SLL) of up to $200 million to LG Innotek Vietnam Haiphong Co., Ltd.

In a recent disclosure of the proposed loan, the IFC said the loan aims to expand the company’s production capacity for smartphone camera modules, part of the latter's $1-billion capital expenditure program to build a new factory in Trang Due Industrial Park in the northern city of Hai Phong.

The loan, subject to approval, can also help reduce greenhouse gas emissions, the IFC stated.

LG Innotek Vietnam Haiphong is a subsidiary of South Korea’s LG Innotek, the electronic component manufacturer under LG Electronics. The Vietnam-based firm now runs two plants in Trang Due Industrial Park within the Dinh Vu-Cat Hai Economic Zone in Hai Phong.

To expand its production capacity, LG Innotek Vietnam Haiphong plans to construct a third factory on the same site in Hai Phong in 2024-2027 and raise debt financing of approximately $1 billion over the same period to partially fund total construction costs of $1.7 billion, according to the IFC.

In April, Hai Phong city's government said LG’s investment in the city had amounted to $8.24 billion, from $1.5 billion in 2013. The investment included $7.24 billion conducted by LG itself, featuring LG Electronics, LG Display, LG Innotek, LG CNS, LG Chemical, and LG International; and $1 billion conducted by 50 of its affiliates.

LG Innotek Vietnam Hai Phong posted revenue of KRW5,763.7 billion ($4.2 billion) in 2023, up 32.6% year-on-year, with a post-tax profit of KRW228.7 billion ($166.9 million), up 56.6%.