81 Trillion Won for 5 Major Strategic Projects, 16 Trillion Won for Export Financing
[Asia Economy Reporter Sim Nayoung] The Financial Services Commission (FSC) announced plans to supply 25 trillion won in policy funds to foster new industries, support exports, and expand venture and innovation companies' access to venture capital. At the presidential briefing held on the 30th at the Blue House State Guest House in Jongno-gu, Seoul, the FSC stated, "We will strengthen policy financial support for New Growth 4.0 and the leap to becoming one of the top five export powers."
According to the FSC's 2023 major business promotion plan, the policy fund supply amount this year is 205 trillion won, an increase of 11 trillion won from last year. In particular, 81 trillion won will be supplied to the 'Five Major Strategic Projects.' These five major strategic projects include ▲support for global super-gap industries ▲fostering future promising industries ▲business restructuring and industrial structure advancement ▲nurturing unicorn ventures, small and medium, and mid-sized enterprises ▲resolving corporate management difficulties.
Specifically, 15.6 trillion won will be invested to support achieving superpower status in key industries such as semiconductors, secondary batteries, and displays; 13.1 trillion won to support growth and competitiveness of future new industries; 17.3 trillion won to support structural improvement of existing key industries due to industrial structure transformation; 9 trillion won to support the leap of high-growth-potential ventures and SMEs to global companies; and 26.4 trillion won to support resolving corporate management difficulties amid a slowing economic outlook.
IBK Industrial Bank of Korea and the Korea International Trade Association will collaborate to supply a total of 16 trillion won in export finance products, including launching low-interest loan products for export SMEs (annual export amount under 10 million USD) with loan interest rates reduced by up to 2.7 percentage points.
A 'Supply Chain Response Fund' of 1 trillion won will be established within this year to respond to global supply chain restructuring. It will support joint overseas expansion of large corporations and their partner companies and strengthen competitiveness in materials, parts, and equipment.
A 15 trillion won Innovation Growth Fund will be created over five years to foster new and strategic industries. The operation period of the Industrial Stability Fund will be extended, and the supported industries will be expanded.
Additionally, through the relocation of the Korea Development Bank to Busan, the role of policy finance in national balanced development and regional specialized industry promotion will be strengthened.
Incentives have also been prepared to attract private investment (venture capital) into venture and innovation companies. A Business Development Company (BDC) will be introduced, which raises funds through public offerings and lists on the exchange, allowing general investors to invest in venture companies.
An FSC official stated, "We are also promoting the institutionalization of 'unlisted stock trading platform operators' to provide promising investment opportunities to investors and growth opportunities to innovative companies."
Financial support for ESG (Environmental, Social, and Governance) and green sector company growth will be expanded. The scope and disclosure contents of the mandatory ESG disclosure system for listed companies, to be implemented from 2025, will be specified. Policy fund support for companies in the ESG and green finance sectors will be increased (from 4.4 trillion won supplied last year to a target of 5.8 trillion won this year).
Through IBK and the Credit Guarantee Foundation, ESG consulting for SMEs will be supported, ESG indices will be developed to enhance ESG companies' capabilities, and investment activation will be promoted.
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