Regional Revitalization Investment Fund Launched Last Year
81.5% of 300 Billion KRW Parent Fund Used Up in One Year
Additional Parent Fund to Be Established to Meet Local Government Demand
Project to Continue Next Year... Government Shows "Strong Policy Will"
The government will establish an additional 300 billion KRW scale parent fund within one year of launching the Regional Revitalization Investment Fund. The existing parent fund, which was created last year, is expected to be fully utilized within the first quarter due to high demand from local governments. The government plans to continue the Regional Revitalization Investment Fund project next year as well.
On the 5th, the government held a meeting of the National Affairs Ministers, Economic Ministers, and Industrial Competitiveness Ministers at the Government Seoul Office in Jongno-gu, Seoul, where it announced the "One-Year Performance and Future Plans of the Regional Revitalization Investment Fund Launch."
The Regional Revitalization Investment Fund is a new regional investment method that promotes large-scale convergence projects desired by regions by utilizing private capabilities and capital. The government, the Local Extinction Response Fund, and the Korea Development Bank each invested 100 billion KRW to create a total 300 billion KRW scale parent fund, and local governments and the private sector establish child funds and project SPCs (Special Purpose Companies) to raise additional investment funds.
Last year, the government launched the Regional Revitalization Investment Fund for the first time, selecting five projects over the course of the year and leading investments totaling 2.4934 trillion KRW. In this process, 81.5% of the parent fund was utilized. Although the parent fund investment period is two years until this year, due to the high number of applications from local governments, the fund was depleted faster than similar policy funds were implemented. In fact, in the case of the New Deal Infrastructure Project Fund, the first project was selected only in January of the year following its launch.
The government plans to use up the remaining 55.6 billion KRW of the parent fund in the first quarter and then establish a new parent fund of 300 billion KRW. To continue the local governments' commitment to regional revitalization, the new fund will be created at the same scale as the existing parent fund. A Ministry of Economy and Finance official explained, "The new launch will take place in April after the selection process of the parent fund management company."
The government expects that the newly established parent fund this year will also be fully utilized within the year. Since there is high demand from local governments, the project will continue next year as well. A Ministry of Economy and Finance official said, "Looking at the candidate projects applied for by local governments, we expect to be able to establish a parent fund at least equal to or greater than this year next year," adding, "The government has a strong policy will for this project."
In the process of strengthening the legal basis for the Local Extinction Response Fund's investment in funds, the government plans to complete the revision of the Local Fund Act in the first half of the year. A service order to support the discovery of various types of convergence projects that maximize regional revitalization effects will also be carried out in the first half of the year. Additionally, next month, a consulting and education dedicated institution will be selected to systematize professional consulting and education related to the fund for interested local governments throughout the year starting in April.
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