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Soft Loan for Energy Saving Facilities & Tax Incentives


KEA provides financial support for investments in energy conservation facilities and GHG reduction projects in order to rationalize energy consumption and encourage GHG reduction.


  • Skyrocketed oil prices during the second oil shock raised awareness for energy conservation. Against this background, KEA started to offer financial supports for investments in energy conservation facilities in November 1980 as a part of the government’s economic stimulus measures to boost demand. This was to revitalize the depressed economy and encourage investments in energy conservation facilities.

This program offers long-term and low-interest rate loans to cover part of the investments in energy saving facilities in order to conserve energy and reduce GHG emission.

  • Entities who want to install energy saving facilities such as waste heat power generation facilities, replacement facilities of obsolete boilers and high-efficiency LED lights are eligible for this program.
  • Scope
    • - All of the construction costs including facilities (secondhand facilities are not applicable) and material costs, labor expenses, overhead expenses and general administrative expenses are covered by this program.

  • Terms
    • - Interest rate: Quarterly adjustable rate linked to average rate of return of 3 year negotiable Korean treasury bond

    • - Terms of repayment: Payable in installments in 5 years with a three-year grace period (Payable in installments in 7 years with a three-year grace period for ESCO)

    • - Limit: Maximum 15 billion won per entity (Maximum 30 billion won for ESCO)

Eligible Entities
  • ESCO investment projects
    • - ESCOs that have a project company-financed new shared savings contract with energy consumers or energy consumers that have a consumer-financed guaranteed savings contract with project companies

  • Investments of the target controlled companies
    • - Companies designated as GHG and energy reduction target controlled entity pursuant to the article 42 of the Framework Act on Low Carbon, Green Growth

  • Energy saving facility installation projects
    • - Entities who want to install facilities designated as target facilities listed in the guideline of this program including replacements of obsolete boilers, waste heat recovery heat pump and compressor system driven by inverter

Eligible Projects
  • ESCO investment projects
    • - Replacement of facilities with those listed as target facilities of this program

    • - Insulation retrofit projects for buildings older than 10 years

    • - Energy conservation project on existing buildings and plants utilizing information technology

    • - Installation of new and renewable energy facilities for private use

      ※ Installation of bioenergy and waste energy facilities is eligible for both private and commercial use.
    • - Projects that are determined to be able to reduce GHG emission or energy consumption by 5% as a result of energy audit

  • Investments in the target controlled companies
    • - Projects to install target facilities of this program

    • - Energy use rationalization and GHG emission reduction through process improvement and fuel change

      ※ New and renewable energy facility installation projects and GHG reduction projects that is not effective for energy conservation are excluded
  • Energy saving facilities installation projects
    • - Projects to install facilities listed as target facilities of this program