50 Trillion Won Advanced Industry Fund to Be Established at Korea Development Bank
Authorized Capital Increased from 30 Trillion to 45 Trillion Won
The "Advanced Strategic Industry Fund" promoted by the government will be established under the Korea Development Bank.
The Financial Services Commission announced that the amendment to the "Korea Development Bank Act," which creates a new Advanced Strategic Industry Fund within the Korea Development Bank, passed the National Assembly plenary session on August 27.
The amendment also includes raising the authorized capital that the government can contribute to the Korea Development Bank from 30 trillion won to 45 trillion won.
In March, the government announced plans to establish the Advanced Strategic Industry Fund to strengthen the ecosystem for advanced strategic industries. Both the ruling and opposition parties jointly sponsored the related legislation.
The fund will provide support to companies in advanced strategic industries such as artificial intelligence (AI), semiconductors, biotechnology, defense, and robotics.
The fund will be raised by issuing "state-guaranteed bonds" at low interest rates similar to government bonds, and the Korea Development Bank will also contribute necessary funds.
The government plans to link 50 trillion won from the Advanced Strategic Industry Fund with private sector funds to create the "National Growth Fund," with a goal of providing more than 100 trillion won in total funding over the next five years.
The advanced fund will support advanced strategic industry companies and related firms not only through ultra-low interest loans at government bond levels, but also through guarantees, equity investments, and indirect investments.
The government explained that it plans to ease the financial burden on early-stage companies and those requiring large-scale facility investments by supplying funds primarily through equity investments, which have not been sufficiently provided by policy finance so far.
The fund will be launched three months after the promulgation of the law, following approval by the Cabinet.
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