"150 Trillion Won in Policy Finance to Be Concentrated in Five Key Sectors Including Advanced Industries"

Financial Services Commission Holds 13th Policy Finance Support Council
150 Trillion Won to Be Invested in Five Key Sectors Next Year, an 8.9% Increase from This Year
Over 40% of Policy Finance to Be Invested in Regional Areas to Promote Balance

Next year, the government will concentrate 150 trillion won in policy finance on five key sectors, including advanced strategic industries, future industries, and ventures. More than 40% of this policy finance will be allocated to regional areas to promote balanced development.

150 Trillion Won to Be Concentrated in Five Key Sectors Next Year, an 8.9% Increase Over This Year

The Financial Services Commission announced on December 24 that it held the 13th Policy Finance Support Council at Front1 in Mapo-gu, Seoul, together with relevant ministries and policy finance institutions, to review this year's policy finance supply and finalize next year's sector-specific policy finance supply plans.

On this day, the four major policy finance institutions-Korea Development Bank, Industrial Bank of Korea, Korea Credit Guarantee Fund, and Korea Technology Finance Corporation-set the total policy finance supply for next year at 252 trillion won. This is a 1.8% increase compared to this year's supply of 247.3 trillion won.

The most notable feature of next year's policy finance is that 150 trillion won, or 60% of the total supply, will be concentrated in five key strategic sectors, including advanced strategic industries and promising future industries. This amount is an 8.9% increase from the 138 trillion won invested this year.

Among the five key sectors, the largest allocation-42.5 trillion won-will be directed to fostering advanced strategic industries such as semiconductors, displays, secondary batteries, future vehicles, nuclear power, and critical minerals (newly added). Another 24.7 trillion won will support promising future industries, including nanotechnology, hydrogen, content, ICT, solar cells, and wind power (newly added).

Additionally, 32.2 trillion won will be invested in restructuring existing industries such as auto parts, shipbuilding, steel, refining, and textiles, as well as upgrading industrial structures. Support for high-growth potential venture companies aiming to become unicorns will total 19 trillion won. Furthermore, 31.8 trillion won will be supplied to help companies overcome management difficulties arising from worsening external conditions.

This supply plan was developed based on demand surveys from each ministry, collected at the 12th Policy Finance Support Council held on October 31. Reflecting the results of these surveys, critical minerals and renewable energy (wind power) have been newly designated as key industries for next year. In response to the growing population of pet owners and the expansion of related industries, support for animal pharmaceuticals and the pet industry within the agri-food sector will also be added and expanded.

Kwon Dae-young, Vice Chairman of the Financial Services Commission, emphasized, "Next year, the role and responsibility of policy finance in supporting the growth engine of our economy will be more important than ever. We will focus more intensively on the five key sectors and provide over 150 trillion won in funding, a significant increase from this year."

He added, "The 150 trillion won supply plan for the key sectors is separate from the National Growth Fund, which will be fully operational from next year. In addition to the policy finance supply plans of the four institutions, the National Growth Fund will provide over 30 trillion won annually to the entire ecosystem related to advanced strategic industries starting next year." According to the Financial Services Commission, the National Growth Fund will differentiate itself from policy finance by supporting mega projects with significant industry impact, long-term equity investments, and risk-sharing initiatives for more proactive corporate support.

Over 40% of Policy Finance to Be Invested in Regional Areas to Promote Balanced Development

It is also notable that more than 40% of policy finance will be invested in regional areas. In line with the government's "Regional Preferential Finance Activation Plan" announced in October, a new policy finance regional supply expansion target system will be implemented starting next year.

The plan is to gradually increase the regional supply ratio of policy finance, which stands at around 40% this year, to 45% by 2028. Accordingly, the regional supply ratio for policy finance is expected to expand to at least 41.7% next year. Vice Chairman Kwon stated, "From next year, with the implementation of the regional supply expansion target system, 106 trillion won-41.7% of total policy finance-will be supplied to regional industries."

At the council meeting, the Financial Services Commission also shared next year's operational plan for the National Growth Fund with relevant ministries and local governments. Detailed operational plans for 7 trillion won in indirect investment (policy funds) within the National Growth Fund were discussed.

The National Growth Fund aims to revitalize industries by establishing a general-purpose fund to broadly support advanced strategic industries, a dedicated scale-up fund, industrial funds for sectors such as artificial intelligence (AI) and semiconductors, and regional funds. To ensure speedy fund execution, recruitment for master fund managers will begin in January next year, marking the start of the fundraising process.

Vice Chairman Kwon stressed, "For policy finance to be supplied efficiently next year and for the successful investment of the National Growth Fund, close communication and collaboration between the Financial Services Commission, which oversees finance, and industry ministries with a deep understanding of the industrial field, are crucial."