GCF and World Bank Korea office anchor Songdo's international finance cluster; Hana Financial Group headquarters moves to Cheongna in September; ecosystem spans climate, development, digital and aviation finance

An aerial view of Hana Dream Town, the Hana Financial Group campus built in Cheongna International City. [Incheon Free Economic Zone Authority]
An aerial view of Hana Dream Town, the Hana Financial Group campus built in Cheongna International City. [Incheon Free Economic Zone Authority]

The Incheon Free Economic Zone is accelerating its push to build a global financial industry hub, with Songdo and Cheongna serving as its two main pillars.

International financial institutions — including the Green Climate Fund and the World Bank Group's Korea office — are already established in Songdo, and Hana Financial Group's major affiliates are set to begin relocating to Cheongna next month. The dual development is raising expectations for a financial ecosystem that links international organizations with private-sector financial firms.

The Incheon Free Economic Zone Authority said Wednesday it plans to connect Songdo's international-organization and climate-finance networks with Cheongna's private and digital finance base to attract additional investment from financial institutions and related companies.

Songdo's emergence as an international finance hub began with the GCF secretariat. Incheon first drew attention as a financial center when it won the bid to host the GCF secretariat in 2012.

Six countries competed for the secretariat at the time — South Korea, Germany, Switzerland, Mexico, Poland and Namibia. Incheon entered the race on the strength of its proximity to an international airport, Songdo's international business environment, and its eco-friendly smart-city infrastructure.

Incheon was ultimately selected as the host city at the GCF board meeting held in Songdo in October 2012, and the fund officially launched there in December 2013.

The GCF has grown substantially since then. At its 44th board meeting held in March, the fund approved $960.3 million in investment for 18 new climate projects, pushing its total portfolio past 354 projects and $20 billion.

The GCF headquarters in Songdo now employs more than 400 staff from roughly 70 countries. Board meetings held twice a year in Songdo draw more than 350 participants, including representatives from national governments, international organizations and development finance institutions.

As the GCF has grown into a center of global climate finance, Songdo has strengthened its standing as a hub city for international organizations and climate finance, according to the zone authority.

The GCF bid also laid the groundwork for attracting additional international financial institutions.

Incheon city and the zone authority pursued the World Bank Group's Korea office as part of efforts to develop Songdo into a Northeast Asian business and international finance hub in tandem with the GCF. The bid succeeded in 2013, and the office officially opened in December of that year.

The World Bank Group's Korea office has served as a channel for sharing South Korea's experience in economic development, information and communications technology, infrastructure and finance with developing countries.

More recently, it has functioned as a global cooperation hub connecting Korean innovation and technology with sustainable development goals.

The successive arrivals of the GCF and the World Bank laid the foundation for Songdo's evolution from a simple international business district into a city with a concentrated cluster of international organizations and development and climate finance activity, the zone authority said.

Cheongna is broadening the scope of the financial industry through private-sector finance.

Incheon city and the zone authority signed an agreement with Hana Financial Group in 2012 to develop a financial town and have pursued the project in stages since then.

An integrated data center opened in 2017, followed by Hana Global Campus — a financial talent development facility — in 2019.

The group headquarters building was completed in May, in effect bringing the Hana Dream Town development project to its final stage.

Hana Financial Group plans to relocate about 2,200 employees from 10 affiliates — including Hana Financial, Hana Bank and Hana Securities — to Cheongna in phases from September through the end of the year. Combined with existing on-site staff, roughly 4,000 finance and IT professionals will work at Hana Dream Town once the moves are complete.

With a major financial group's headquarters, key affiliates and specialized workforce converging in one location, Cheongna is increasingly positioned to become a new center for private and digital finance.

The zone authority plans to use Hana Financial Group as an anchor tenant to attract additional finance-related companies.

It intends to recruit firms in emerging sectors such as digital assets, blockchain and fintech to Cheongna, while also leveraging Hana Financial Group's global network and Incheon International Airport's proximity to draw overseas financial institutions and foreign companies.

Cooperation between Songdo's international organizations and Cheongna's private financial firms will also be strengthened. The plan is to link the international networks of the GCF and the World Bank Korea office with Cheongna's finance and IT industry base, creating a structure in which international and private finance grow together.

Over the longer term, the zone authority is also examining the potential to develop specialized financial sectors — including aviation finance and ship finance — that reflect Incheon's industrial characteristics, in connection with major development projects in Cheongna.

Incheon city's strategy is to develop Songdo and Cheongna as respective hubs for international finance and private and digital finance, while connecting the two areas into a single financial ecosystem.

"The GCF and World Bank's establishment in Songdo and Hana Financial Group's relocation to Cheongna are the result of years of work building a global city foundation and earning trust," Incheon Mayor Park Chan-dae said.

He added: "We will develop the Incheon Free Economic Zone into a global financial and business city that the world takes notice of, with Songdo's international and climate finance and Cheongna's private and digital finance as the two pillars."


gilbert@heraldcorp.com