LG Chem has become the first company to receive investment guarantee support from Korea Trade Insurance Corporation (K-Sure) for a U.S. project following the recent Korea-U.S. trade agreement. This move is seen as the starting point for the bilateral investment fund that both countries plan to establish for investments in the United States.
On August 3, K-Sure announced that it will provide a financial guarantee worth $1 billion (approximately 1.4 trillion won) for LG Chem's new cathode material plant project in Tennessee, United States.
Currently, LG Chem is investing about 2 trillion won in the first phase to build a cathode material plant with an annual capacity of 60,000 tons on a 1.7 million square meter site in Clarksville, Tennessee. The Tennessee plant, scheduled to begin operations next year, will have the capacity to produce cathode materials for about 600,000 high-performance pure electric vehicles (EVs capable of 500 km range) annually, making it the largest cathode material plant in the United States.
With K-Sure's guarantee, LG Chem will be able to secure long-term financing at low interest rates from global banks. The establishment of the Tennessee plant is expected to strengthen LG Chem's local supply chain, providing a foundation for flexible responses to changes in the U.S. trade environment, such as the imposition of reciprocal tariffs.
Previously, through tariff negotiations, Korea and the United States agreed to create a $200 billion (about 278 trillion won) investment fund for the United States, to be used for investments by Korean companies in sectors such as semiconductors, nuclear power, secondary batteries, and bio industries. Regarding this, Kim Yongbeom, Senior Presidential Secretary for Policy, explained at a briefing on July 31, "The equity and direct investment portion from the fund will not be high; most of it will be in the form of loans and guarantees," adding, "In my view, guarantees provided by the Export-Import Bank of Korea or K-Sure are likely to exceed the amount of loans."
K-Sure further explained that future guarantee support from the U.S. investment fund will likely follow a similar model to the financial guarantee provided to LG Chem. Jang Youngjin, President of K-Sure, stated, "As a result of the U.S. tariff negotiations, we expect more Korean companies with outstanding technology to enter the U.S. market," and added, "In response, K-Sure will ensure seamless support, including guarantees for financing."
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