National Growth Fund Scaled Up to 150 Trillion Won to Invest in Advanced Industries Including AI, Robotics, and Defense

5 Trillion Won Fund to Launch in Early December
75 Trillion Won in Private Capital Includes "Public Participation" Model

Financial authorities have significantly expanded the planned size of the "National Growth Fund" from the initial 100 trillion won to over 150 trillion won. Over the next five years, the fund will support 10 advanced industries and their value chains (ecosystems), including artificial intelligence (AI), semiconductors, and biotechnology, with the aim of bolstering major industries. The initiative also aims to redirect market capital from real estate into productive industries.

The Financial Services Commission announced on September 10 that it held the "National Growth Fund National Briefing" at Mapo Front One, joined by relevant ministries, industry leaders, the venture and startup sector, and the financial industry.

The National Growth Fund will provide broad and bold support over the next five years to companies in advanced strategic industries such as artificial intelligence, semiconductors, biotechnology, vaccines, robotics, hydrogen, secondary batteries, displays, future vehicles, and defense. This is expected not only to strengthen industrial competitiveness but also to drive scaling up of venture and technology companies, regional growth, and job creation, generating diverse added value. The Financial Services Commission estimates the fund's size at up to 125 trillion won.

The fund will be established through a public-private partnership. The government initially planned for a 100 trillion won fund but increased the amount by about 50 trillion won. The Advanced Strategic Industry Fund managed by Korea Development Bank will account for 75 trillion won, while another 75 trillion won will come from private, public, and financial sector capital.

The Advanced Strategic Industry Fund will be launched in early December. The private, public, and financial sector capital will be raised with the government’s 1 trillion won in fiscal seed money. This fiscal support will be used to bear higher risks or to encourage early participation compared to private, public, and financial sector capital.

Financial authorities plan to increase participation from the banking, securities, insurance, and pension sectors by easing sector-specific soundness and operational regulations. The calculation of risk-weighted assets (RWA) for loans will be revised so that financial institutions can more actively provide corporate loans or venture investments, rather than focusing on mortgage loans. The fund will be executed through various methods, including direct and indirect equity investments, infrastructure investments, and ultra-low-interest loan support.

When establishing new corporations or factories requiring large-scale investment, the National Growth Fund may participate as an equity investor or provide funding for mergers and acquisitions (M&A) of technology companies.

The plan also includes participating in the construction of AI data centers and advanced industrial complex infrastructure, as well as providing large-scale facility investment capital for AI data centers and advanced industrial complexes at government bond rates in the 2% range.

There are plans to create ultra-long-term technology investment funds for technology companies, with some structured for public participation. This is designed so that the public can also share in the profits generated during the growth process. Large-scale projects with significant industrial impact and symbolic value, such as the "Top 30 Declaration Project" under the new government’s economic growth strategy, may be given priority support.

The Financial Services Commission stated that this fund represents a flagship initiative for a "financial transformation" that redirects market capital into productive sectors. The commission said, "Through productive finance, we will fundamentally reshape the framework of our financial sector," adding, "We will foster innovation in banks’ financial intermediation, nurture mega-investment banks, and vitalize venture capital and the KOSDAQ market. Through these efforts, we will create a virtuous cycle in which the real economy and finance grow together, and the resulting benefits are shared broadly among companies, citizens, and regions."