LG Innotek secures $200 mln IFC loan for Vietnam expansion
LG Innotek, a subsidiary of South Korean chaebol LG, has secured $200 million in funding from the World Bank’s International Finance Corporation (IFC), aiming to expand its manufacturing base in Vietnam’s northern port city of Hai Phong.
According to its announcement on Wednesday, LG Innotek said that the eight-year sustainability-linked loan, designed to incentivize stronger environmental, social and governance management practices, marks the first time a South Korean company has obtained such funding from the World Bank unit.
LG Innotek Vietnam Hai Phong plant. Photo courtesy of LG Innotek.
The electronic firm applied for the loan last year and was awarded approval after review. In 2024, LG Innotek converted nearly 60% of its global electricity consumption to renewable sources, with its plants in Vietnam and South Korea meeting the RE100 renewable energy target that year.
The financing will support LG’s competitiveness in global supply chains by enabling the company to move up the value chain and increase exports of higher value-added products.
LG Innotek Vietnam Hai Phong (LGITVH), which operates two factories in Hai Phong and employs more than 5,000 workers, plans to use the funds for its third plant there.
The new facility, known as V3, spans about 150,000 square meters and has already come online, doubling LG Innotek’s camera module capacity in Vietnam.
The construction of the V3 plant follows LG Innotek’s July 2023 pledge to invest $1 billion in Vietnam by the end of 2025 to enhance its optical solutions production capacity, The Korea Times reported.
South Korean media cited sources saying LG Innotek aims to make Vietnam a hub for 70-80% of its camera module output within the next two to three years. Camera modules account for roughly 80% of the company’s revenue.
LG Innotek Vietnam Hai Phong earned a revenue of KRW1.15 trillion ($834 million) and profit of KRW66.9 billion ($48.27 million) in the first quarter of 2025, down 35.6% and 30.8% year-on-year, respectively.
As of April 2024, LG’s investment in Vietnam, mostly in the northern coastal city of Hai Phong, had reached $8.24 billion.
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