Policy Loans for Overseas Infrastructure Development Will Increase to 400 Bil. Won

The Ministry of Land, Infrastructure and Transport (MOLIT) announced on December 25 that it is scheduled to finalize an agreement on December 26 between policy-oriented financial institutions and public organizations to double the size of Global Infrastructure Fund I (GIF I) from 200 billion won to 400 billion won (US$189-378 million). GIF I was launched with private-public investment in December 2009. 

The agreement is aimed at giving financial support for overseas infrastructure development projects that need long-term capital investment to diversify the structure of overseas construction orders and to increase profits. 

The exiting GIF I will be expanded and reorganized as a policy loan. State-run financial institutions like KDB will be allowed to participate to encourage investments that were not made properly for 4 years after the investment agreement. These investments were due to a tendency for private investors to take a conservative investment approach. 

A MOLIT official said, “Investments will be made as a form of capital loan or subordinated loan from the relatively risky construction stage,” adding, “It will be made possible to support nearly 6.7 trillion won [US$6.3 billion] of investment development-type projects because of the increased size of the fund.”