Government to Establish '200 Billion' Battery Fund with Joint Investment from Samsung SDI and Others

Ministry of Industry Launches '2nd Battery R&D Innovation Fund'
Investing in About 30 Small and Medium Enterprises Over 8 Years
Expected Investment of 5 to 10 Billion KRW Per Company

An LG Energy Solution employee is showcasing a cylindrical battery. [Photo by LG Energy Solution]

[Asia Economy Sejong=Reporter Lee Jun-hyung] The government has established a 200 billion KRW secondary battery fund together with the three battery companies, including Samsung SDI.

The Ministry of Trade, Industry and Energy announced on the 17th that it held the inauguration ceremony for the ‘Secondary Battery Research and Development (R&D) Innovation Fund’ at COEX in Seoul. The ceremony was attended by Minister Moon Seung-wook of the Ministry of Trade, Industry and Energy, as well as representatives from the three domestic battery companies that invested in the innovation fund: Samsung SDI, SK On, and LG Energy Solution.

The size of the secondary battery innovation fund is 200 billion KRW. The fund consists of 30 billion KRW in policy funds, 20 billion KRW in investments from the three battery companies, and 150 billion KRW in private investments. This amount is about 2.5 times larger than the 80 billion KRW initially expected by the government when the fund was established in the second half of last year. Initially, the government had fixed the policy funds and the battery companies’ investments at 50 billion KRW and expected private investment participation to be around 30 billion KRW.

The fund’s operation period is eight years. To secure sufficient growth opportunities for promising small and medium-sized enterprises (SMEs) in the secondary battery sector, the investment recovery period was set to a maximum of eight years. A Ministry of Trade, Industry and Energy official explained, “It is expected that about 30 companies will be invested in during the fund’s operation period,” adding, “Investments of 5 to 10 billion KRW per company will be made.”

The Ministry expects the first investment from the fund to be made within this month. The investment companies will be finally selected by Paratus Investment, the fund management company, based on evaluations focusing on technological potential. The Ministry plans to support technology consulting for the invested companies through the participation of specialized institutions.

Minister Moon said, “So far, the co-growth of materials, parts, and equipment companies supporting the external growth of battery companies has been insufficient,” adding, “I hope that this fund will serve as an opportunity to establish a domestic materials, parts, and equipment ecosystem that matches the competitiveness of our secondary battery industry.” He also added, “Since nurturing materials, parts, and equipment companies has limitations with government funding alone, this cooperation model can become a good precedent.”