Shinbo, 100 Trillion Won for Green Finance by 2030... Comprehensive Support Plan for Regional Development Established

The Korea Credit Guarantee Fund (KODIT) will support 100 trillion KRW in the green finance sector by 2030. Additionally, to promote regional economic development in the 'local era,' it will establish a comprehensive four-stage support system according to the growth stages of local companies and continuously expand collaboration with local governments and venture capital (VC) firms.

On the morning of the 27th, Choi Won-mok, Chairman of KODIT, held a press briefing at the Bankers' Hall in Jung-gu, Seoul, to commemorate the 48th anniversary of the foundation. He stated, "Following the new vision announced last year, 'Beyond Guarantee,' KODIT aims to go beyond the limitations of simple guarantee support and provide comprehensive solutions that enable all customers to receive the best services from the optimal institutions at the right time."

First, KODIT plans to supply 100 trillion KRW in the green finance sector over the next seven years until 2030. This supply target reflects the average annual growth rate (11.1%) of the green finance supply amount over the past five years and the intention to expand green finance. Through this capital supply, KODIT plans to contribute to the government's carbon neutrality policy implementation. The supply target for this year is 11.1 trillion KRW, an increase of 1 trillion KRW compared to the previous year, and the target for 2030 is 17.9 trillion KRW.

Earlier, in May last year, KODIT issued the first Green Asset-Backed Securities Guarantee (G-ABS) to encourage participation in green economic activities by small and medium-sized enterprises (SMEs) and mid-sized companies. In collaboration with the Ministry of Environment and the Korea Environmental Industry & Technology Institute, it provided interest rate subsidies of up to 4.2 percentage points annually per company, reducing the financial costs for green companies. The amount of funds supplied reached 155.5 billion KRW (with a 5.7 billion KRW interest reduction) last year alone and 109.1 billion KRW in the first quarter of this year.

At the end of last year, through an agreement with the Korea Real Estate Board, KODIT calculated building energy emissions and provided up to 1 billion KRW in working capital to manufacturing companies that voluntarily reduced greenhouse gases, along with benefits such as a reduction in guarantee fees (0.3 to 0.5 percentage points) for up to five years.

Moreover, KODIT plans to build an innovation ecosystem for balanced regional development. This year, it will also prepare a comprehensive support plan based on collaboration to drive the local era. According to the growth stages of local companies, it will establish a four-stage support system: ▲activation of local startups ▲development of local companies ▲support for rapid growth ▲specialized support for strong and mid-sized companies. For the first stage, activation of local startups, it plans to create exclusive products for companies within seven years of establishment that operate in local key industries, offering preferential benefits regarding guarantee limits, ratios, and fees.

To foster local companies, KODIT will promote projects linked with local governments (such as preferential treatment for companies located in opportunity development zones) to enhance the competitiveness of local companies. For companies in the rapid growth support stage, it plans to select 'local core companies' (tentative name) and continue support at the level of innovation icons (with limits up to 20 billion KRW). For strong and mid-sized companies, it will provide financial support when they invest domestically alongside large corporations or expand overseas.

Collaboration for balanced regional development will continue. The scope of collaboration will be expanded from the existing five major metropolitan cities to provincial (do) levels, and multifaceted projects linked with local government support programs will be promoted. Furthermore, collaboration systems with the private sector, including VCs, will be expanded, and preferential measures will be prepared to improve investment conditions for local innovative companies.

Chairman Choi said, "With the acceleration of local extinction phenomena, the need for specialized support beyond existing preferential methods is increasing. KODIT will strengthen the growth engine of local areas through systematic support plans that can create synergy effects through collaboration."

Meanwhile, since announcing the new vision last year, KODIT has formed a network of private, public, and government institutions and is evaluating its achievements in 'KODIT-style collaboration.' A representative case is the cooperation with Hyundai Motor Group, where KODIT established guarantees for SMEs and mid-sized companies pursuing overseas expansion and investment, supporting five companies with 126.4 billion KRW so far. This month, KODIT introduced a special guarantee to meet the large-scale funding demand of SMEs and mid-sized companies pursuing domestic investment, using Hyundai Motor Group's special contribution fund (25 billion KRW) as resources to support partner companies with up to 30 billion KRW (total limit of 500 billion KRW). Based on the agreement model with Hyundai Motor Group, KODIT plans to pursue contribution agreements with other large corporations in the future.