SEOUL, July 22 (AJP) - Korea Development Bank plans to launch a sweeping 100 trillion won (approximately $73 billion) investment fund aimed at strengthening South Korea’s capabilities in critical high-tech sectors, including artificial intelligence, semiconductors, biotechnology, and robotics.
According to financial industry sources, the state-run lender has formed a task force to lay the administrative groundwork for the fund and is actively exploring organizational restructuring.
One proposal under review calls for the creation of a dedicated, senior-level department to oversee the fund's operations.
The initiative, part of a broader government strategy to future-proof Korea’s economy, envisions a public-private partnership anchored by state capital and expanded through investments from pension funds, private financial institutions, and individual investors.
The plan begins with 50 trillion won in seed funding over five years, led by KDB and other government-affiliated entities, with the goal of ultimately surpassing 100 trillion won through expanded participation.
The fund will be managed separately within KDB’s accounting system and will have a 20-year time horizon. Financing mechanisms include government-guaranteed fund bonds, borrowings from the Bank of Korea, and direct capital injections from public and private sector partners.
Fund bonds will be issued in phases under annual ceilings set by the National Assembly, with projected annual issuance ranging from 9 trillion to 10.25 trillion won, depending on market conditions and funding needs. Officials expect these instruments to play a central role in mobilizing the full capital target in collaboration with commercial banks.
The fund’s investment mandate will focus on projects and infrastructure tied to strategic technologies, including semiconductors, secondary batteries, displays, biotechnology, defense systems, robotics, vaccines, hydrogen energy, next-generation mobility platforms, and AI.
Support will be extended across the industrial spectrum — from large conglomerates to small and mid-sized enterprises — provided they align with the fund’s technological focus areas.
Financial assistance will take a range of forms, including low-interest loans, equity stakes in joint ventures or special-purpose vehicles, subordinated loans for long-term infrastructure development, and structured financing packages for technology buyers.
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