Government to Reduce Small Business Electricity Bills by Up to 50%

Ministry of Industry Prepares 220.2 Billion Won Supplementary Budget Proposal and Submits to National Assembly
Targeting 1.15 Million Small Business Owners in Sectors Affected by Gathering Bans and Restrictions... Three-Month Fee Reduction from April to June

[Sejong=Asia Economy Reporter Kwon Haeyoung] The government will reduce electricity bills by up to 50% for 1.15 million small business owners affected by the strengthened 'social distancing' measures due to COVID-19. Small business owners in industries subject to closure or restrictions are expected to receive an average benefit of about 190,000 KRW. The payment deferral system for electricity and city gas bills for small business owners, which was scheduled to be applied until next month, will also be extended until June.

On the 2nd, the Ministry of Trade, Industry and Energy submitted an additional supplementary budget plan of 220.2 billion KRW to the National Assembly for the small business electricity bill reduction project. This is to support small business owners whose utility burdens have increased due to quarantine measures following the strengthening of social distancing.

The support targets are 185,000 businesses in the closure category and 966,000 businesses in the restriction category. The Ministry plans to support 50% of electricity bills monthly for three months from April to June for closure industries, and 30% for restriction industries. Considering that the average monthly electricity bill for small business owners in Daegu and Gyeongbuk is 192,000 KRW, the estimated support amount is 53.3 billion KRW for closure industries and 166.9 billion KRW for restriction industries. The electricity bill support project will be implemented once the supplementary budget is approved through National Assembly deliberation.

The payment deferral for electricity and city gas bills, which started in April last year and was scheduled to be applied until this month, will also be extended for three months until June. If a deferral is requested, the payment deadline for three months' worth of electricity and city gas bills will be extended by three months.

The Ministry will also promote an early cash conversion project for export accounts receivable targeting small and medium-sized export companies facing liquidity issues. This project guarantees export accounts receivable cash conversion through banks by the Korea Trade Insurance Corporation, and the Ministry plans to provide early support of more than 400 billion KRW in the first half of this year. This is a significant increase from 177 billion KRW in the first half of last year.

An official from the Ministry said, "We will promptly execute the 2021 supplementary budget as soon as it is approved by the National Assembly and do our best to manage it."