Korea’s Article 6 model: Financing projects and managing risk

Here are some key takeaways from the report

• Korea is establishing itself as one of the first movers on the demand side of Article 6 through its financing procurement model, building a pipeline of ITMOs by co-financing early-stage project development costs. 

• This is both a high-risk and high-reward strategy. The success of the scheme relies on identifying projects with strong delivery potential and managing the risks associated with project development and execution. 

• Ex ante carbon ratings help public and private investors to assess project execution and performance risk before committing capital, enabling them to direct finance to projects with the greatest likelihood of delivering high-integrity credits.