The Korea Development Bank (KDB) is accelerating its capital increase and organizational restructuring to create a 100 trillion won advanced strategic industry fund. The advanced strategic industry fund is a large fund established by the government to strengthen the competitiveness of advanced strategic industries such as artificial intelligence (AI), semiconductors, biotechnology, and robotics.
According to the financial sector on the 21st, the KDB is forming a task force (TF) for the practical work of establishing the advanced strategic industry fund and is in discussions for organizational restructuring. The KDB is reviewing a plan to establish a dedicated department for the advanced strategic industry fund at the level of a vice president.
Currently, it is coordinating personnel and budget with key ministries such as the Ministry of Economy and Finance and the Financial Services Commission. The newly established organization is expected to have about 60 to 65 staff members. The plan for the fund's creation has reportedly been reported to the Presidential Committee on Policy Planning.
The advanced strategic industry fund will be created as a national fund comprising contributions from the public, corporations, the government, and pension funds. The government, including the KDB, will establish a strategic fund for advanced industries worth about 50 trillion won and then add funds from pension funds, private financing, and individual investors to create a fund exceeding 100 trillion won in scale.
Both parties are promoting amendments to the Korea Development Bank Act in two tracks, focusing on the basis for fund creation and capital increase. On the same day, the National Policy Committee of the National Assembly held a subcommittee meeting to review an amendment to the Korea Development Bank Act that includes the establishment of the advanced strategic industry fund.
To ensure stable industrial support, a bill to increase the KDB's authorized capital (the legally permissible limit for capital increase) is also in progress. Earlier, lawmakers Kim Tae-nyeon (40 trillion won) and Park Sang-hyuk (45 trillion won) from the Democratic Party and Kweon Seong-dong (50 trillion won) and Yoon Han-hong (60 trillion won) from the People Power Party each proposed amendments to increase the KDB's authorized capital.
A financial sector official noted, "We expect the KDB amendment to be processed with bipartisan agreement as early as this month or early next month."
The KDB's legal capital has been maintained at 30 trillion won since it was increased from 20 trillion won in 2014. The financial sector has expressed concerns that the KDB's growing role in industrial support may act as a hindrance to fulfilling its policy financing role due to capital restrictions.