[Asia Economy Reporter Song Hwajeong] National policy banks are actively supporting innovative growth.
Industrial Bank of Korea (IBK) is significantly expanding the scale of fund formation and direct investment support every year to foster new industries and support next-generation promising companies for securing future new growth engines.
According to IBK, as of the end of 2021, the total size of funds under management increased significantly to 33.6 trillion KRW (IBK commitment 13.9 trillion KRW) compared to 25.4 trillion KRW at the end of 2020. Collaborating with private capital, IBK is leading large-scale equity investment projects and driving the expansion of venture and patient capital supply as a key investor to promote innovative growth.
Through the Policy-type New Deal Fund (2021?2025, 20 trillion KRW), IBK is strengthening a self-sustaining New Deal investment ecosystem. The establishment of the Growth Support Fund (2018?2020, 9.9 trillion KRW) laid the foundation for scaling up innovative companies, pioneering the era of the first single venture fund of 500 billion KRW in Korea. Direct investment in promising innovative companies is also actively pursued, with the IBK Venture Finance Headquarters’ investment performance increasing significantly each year?from 125.4 billion KRW in 2019 to 368.8 billion KRW in 2020, and reaching 575.3 billion KRW last year?making it the largest venture investment institution in Korea.
IBK plans to focus all its capabilities on promoting innovative growth by continuously pursuing large-scale fund formation, expanding financial support for scale-up and future technology investments, expanding and operating venture support and nurturing platforms to revitalize the innovative startup ecosystem, and expanding the venture territory through building a global venture network.
Korea Eximbank decided last month to invest 100 billion KRW to establish a fund focusing on key strategic industries such as semiconductors, batteries, bio, and future cars.
The final fund size is expected to exceed 500 billion KRW, with the goal of forming the fund within this year. In particular, the investment target will be expanded to upstream and downstream companies related to the supply chain of key strategic industries, proactively responding to supply chain risk management and diversification, which have recently emerged as core economic security issues.
Korea Eximbank plans to supply a total of 14 trillion KRW in financing to innovative growth sectors this year, including 6.5 trillion KRW in support for key strategic industries.
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