50 Trillion Won in Policy Finance to Be Provided to Address Supply Chain Uncertainties

Announcement of Full-Cycle Financial Support Plan for Supply Chain Stabilization

The government will provide a total of 50 trillion won in policy finance throughout 2025 to respond to global supply chain uncertainties. This includes a 10 trillion won Supply Chain Stabilization Fund, with the Export-Import Bank of Korea, Korea Development Bank, and Industrial Bank of Korea offering low-interest financing to support companies' stable funding. The government plans to strengthen support at each stage by dividing the supply chain into upstream (exploration, resource acquisition, research, development), midstream (transportation, distribution), and downstream (processing, production, securing demand).

Deputy Prime Minister and Minister of Economy and Finance Koo Yoonchul is attending and speaking at the Supply Chain Stabilization Committee held at the Government Seoul Office in Jongno-gu, Seoul on August 20, 2025. Photo by Jo Yongjun

On the 20th, Deputy Prime Minister and Minister of Economy and Finance Koo Yoonchul held the 5th Supply Chain Stabilization Committee and announced the "Full-Cycle Financial Support Plan for Supply Chain Stabilization." The government diagnosed that the competitiveness of the secondary battery industry has weakened due to slowing demand for electric vehicles and the influx of low-priced Chinese products, while industries such as petrochemicals and steel are facing limits due to global oversupply.

Supply chain instability has become prolonged, compounded by geopolitical risks such as the war in Ukraine and the crisis in the Middle East. Major countries including the United States, Japan, and the European Union are focusing on domestic support through measures such as the CHIPS Act and the Critical Raw Materials Act. The government explained, "We will select sectors with significant impact on the national economy and high supply chain ripple effects as full-cycle support targets and provide intensive support."

This year alone, 50 trillion won in policy finance will be injected. Low-interest policy funds totaling 45.8 trillion won will be supplied through 10 trillion won from the Supply Chain Stabilization Fund, 13.3 trillion won from the Export-Import Bank of Korea, 18 trillion won from the Korea Development Bank, and 4.5 trillion won from the Industrial Bank of Korea. Guarantee and insurance support through the Credit Guarantee Fund, Korea Technology Finance Corporation, and trade insurance will also be provided up to a limit of 4.4 trillion won. The government will strengthen support at each stage by dividing these funds into upstream (exploration, resource acquisition, research, development), midstream (transportation, distribution), and downstream (processing, production, securing demand).

Leading small and medium-sized enterprises (SMEs) and mid-sized companies will be provided with ultra-low interest funds at levels comparable to government bonds, significantly reducing their financial costs. The aim is to enhance tailored support so that SMEs, which are relatively vulnerable to supply chain shocks, can continue stable production and investment.

The investment function of the Supply Chain Stabilization Fund will also be greatly expanded. By activating equity and fund investment functions, investments will be increased to 50 billion won this year and 100 billion won in 2026. Going forward, the government plans to prioritize support for projects related to first-grade economic security items and services, which are considered core strategic sectors, to protect supply chains directly linked to national security, such as resources, logistics, and core technologies. The fund will focus on supporting advanced industries such as AI, semiconductors, secondary batteries, critical minerals, aerospace, and defense. However, detailed items will not be disclosed to the public.

The scope of indirect investment targets for the supply chain fund will also be expanded. To promote the growth of small and venture businesses, the range of indirect investment targets, which was previously limited to collective investment schemes, will be broadened to include venture investment associations and new technology investment associations. The government is also considering the creation of a "Supply Chain Stabilization Venture Fund" jointly funded with the Korea Fund of Funds. The government stated, "We will actively work to promptly revise relevant laws to enable the Export-Import Bank of Korea's contributions to the supply chain fund and expand investment targets," and added, "To spread public-private cooperation, we will identify model cases of collaborative projects."