"Falling Oil Prices and Demand Drop: 'Recycling Companies' Rescue"… Ministry of Environment Provides 98.4 Billion Won Loan Support

Asia Economy DB=Yoon Dong-joo reporter doso7@

[Asia Economy Reporter Kim Bo-kyung] The Ministry of Environment announced on the 1st that it will inject a total of 98.4 billion KRW in recycling industry development loan funds in the second quarter of this year alone to support waste recycling companies.

This is in response to the recent difficulties faced by the recycling industry due to a decline in demand for recycled raw materials caused by falling oil prices and the impact of the novel coronavirus disease (COVID-19).

The loan fund support targets waste recycling companies. Detailed information such as loan support conditions can be found in the Korea Environmental Industry & Technology Institute's Environmental Policy Fund Support System (loan.keiti.re.kr) notice.

Recycling companies wishing to apply for loan support can do so through the Environmental Policy Fund Support System starting from the 13th. After going through the financial institution's screening process, loans can be provided as early as next month.

In particular, the Ministry of Environment established a new market stabilization fund of 20 billion KRW this year. This fund will support recycling companies experiencing short- to mid-term sales slumps due to market changes by providing long-term low-interest loans to cover expenses related to stockpiling and storing recyclable materials.

The market stabilization fund allows companies to apply for loan support up to a maximum of 1 billion KRW per company, with the policy interest rate announced quarterly by the Ministry of Environment applied. The policy interest rate for the first quarter is 1.41%, and the rate for the second quarter will be finalized early this month.

According to a preliminary survey conducted by the Ministry of Environment on the demand for the newly established market stabilization fund this year, about 45.7 billion KRW in demand was identified from 125 companies.

Companies requiring facility improvements or labor cost support can receive loans through facility funds or operating funds support.

Facility funds provide loans up to a maximum of 5 billion KRW per company for purposes such as purchasing recycling equipment and installing recycling facilities. Operating funds can be used by recycling companies for raw material purchase costs, labor costs, fuel costs, etc., with a maximum limit of 1 billion KRW per company.

The application schedule and method for facility funds and operating funds are the same as those for the market stabilization fund, and companies should apply according to the purpose of their loan funds.

Lee Young-gi, Director of the Resource Circulation Policy Division at the Ministry of Environment, stated, "We will make every effort at the government level to early expand support for long-term low-interest recycling industry development funds so that the recycling industry can wisely overcome difficult situations, and to additionally identify demand."