Financial Support for Eco-friendly Vehicle Companies in Gwangju to Become More Active

Ministry of Trade, Industry and Energy Selects Kwangju Bank for 'Subsidized Interest Support Project'
Up to 10 Billion KRW Loan Limit for SMEs and Mid-sized Companies... Interest Support Provided

Gwangju City Hall exterior view.

Gwangju City announced on the 17th that Kwangju Bank has been selected as a participating financial institution for the 'Subsidized Interest Support Project for Eco-friendly Vehicles,' a program by the Ministry of Trade, Industry and Energy aimed at easing the financial burden of small and medium-sized enterprises (SMEs and mid-sized companies) preparing for the transition to future vehicles.

The 'Subsidized Interest Support Project for Eco-friendly Vehicles' is a government initiative that provides dedicated loan products at lower interest rates compared to market rates for SMEs and mid-sized companies needing funds for facility investment, mergers and acquisitions (M&A), and research and development (R&D) in the production of eco-friendly vehicle parts such as electric, hydrogen, and hybrid vehicles. The government supports the interest on these loans.

Loans are provided up to a limit of 10 billion KRW per company, with a grace period of up to 3 years and principal repayment in equal installments four times a year. The loan interest is supported up to 2% for SMEs and 1.5% for mid-sized companies, with facility and M&A funds supported for up to 8 years and R&D funds for up to 5 years.

With Kwangju Bank now included as a participating institution in this subsidized interest project, parts manufacturers in Gwangju and Jeonnam that develop, produce, and assemble components for eco-friendly vehicles are expected to see a reduction in their loan interest burden.

The city has made various efforts to ensure that regional banks could be included as participating institutions for the 'Eco-friendly Vehicle Subsidized Interest Financial Products,' which had previously only been handled by central banks such as the Korea Development Bank or banks in other regions.

Local parts companies wishing to benefit from the subsidized interest project can apply through the Korea Institute for Advancement of Technology (KIAT) website or the KIAT project management system, K-PASS. After passing the KIAT review and obtaining a recommendation letter, companies can apply for loans at Kwangju Bank. Applications are open from the announcement date until mid-April, and the 2025 support budget is 5.4 billion KRW; recruitment of new beneficiaries will close once the budget is exhausted.

Lee Donghyun, Director of the Future Vehicle Industry Division, stated, "Until now, local financial institutions were not included as participating institutions for the eco-friendly vehicle subsidized interest project, so Gwangju's eco-friendly vehicle parts companies could not benefit due to limited accessibility. This year, with Kwangju Bank included, we hope it will help reduce the financial burden for local parts companies, even if only a little."