The South Korean government will provide 15 trillion won (US$13.23 billion) in low-cost loans to small and medium-sized enterprises (SMEs) within the year in order to help them modernize their production facilities and increase investment in safety and environmental production measures.
The government will also step up efforts to remove hurdles for investment so that domestic companies can start executing their planned investments worth 2.3 trillion won (US$2.03 billion) in the first half of next year.
These and other investment promotion programs were approved at an economic ministerial meeting presided over by Deputy Prime Minister and Finance Minister Kim Dong-yeon on Oct. 24.
The government will first help a company, whose name was not disclosed, launch its 1.5 trillion won (US$1.32 billion) plant expansion project in Pohang Yeongil Bay in the first half of next year by providing the plant site in advance.
It will also help another company reclaim a site in the Yeosu National Industrial Complex so that it can start a 450 billion won (US$396.83 million) plant expansion project as scheduled.
It will also provide 350 billion won (US$308.64 million) for the development of the Yeosu-Gwangyang Port Complex.
The 15 trillion won (US$13.23 billion) policy loan program consists of 10 trillion won (US$8.82 billion) set aside to help SMEs upgrade their production facilities and 5 trillion won (US$4.41 billion) to be provided to finance companies’ investment in safety enhancement and environmental protection measures.
Low-cost loans from the Korea Development Bank (KDB) and the Industrial Bank of Korea (IBK) will cover 80 percent of the costs for plant modernization, with SMEs shouldering the remaining 20 percent.
The KDB and the IBK will provide loans with a 1 percentage point lower interest rate to help SMEs invest in environmental protection and safety facilities and improve obsolete facilities and buildings.
In addition, major state agencies will invest 26.1 trillion won (US$23.02 billion) in the housing, environment and safety, and renewable energy sectors, up 8.2 trillion won (US$7.23 billion) from 17.9 trillion won (US$15.78 billion) this year.
More specifically, they will make a 15.2 trillion won (US$13.4 billion) investment in the housing sector to build public rental apartments, develop new cities and improve housing welfare. They have also budgeted 6.5 trillion won (US$5.73 billion) for the environment and safety sector, such as the reduction of particulate matter pollution and the improvement of old power plants. They have also decided to put 4.4 trillion won (US$3.88 billion) into the renewable energy sector, including fuel cell and solar energy. The figure is nearly three times higher than 1.4 trillion won (US$1.23 billion) this year.