The national growth fund that the government aims to establish with 100 trillion won plus alpha will begin fundraising activities starting this year. The plan is to secure more than 50 trillion won through contributions from the Korea Development Bank and government-guaranteed fund bonds, and to raise over 50 trillion won through public subscriptions from ordinary citizens and investments from pension funds and private finance.
The government is also expected to invest around 4 trillion won as a catalyst.
After the fund is established, at least more than 20 trillion won will be invested in future strategic industries centered around artificial intelligence (AI). It will also support facility investments and operational funds related to energy infrastructure and strategic technology and venture companies.
The fund will be utilized in two forms. Investments in venture and small and medium-sized enterprises will be made in the form of equity investment without the burden of interest, similar to venture capital.
From the perspective of corporations, this reduces the burden of interest while also providing access to a network of government and finance experts.
Major shareholders may feel burdened, thinking that they have to give up part of their management rights equivalent to the equity they surrender. However, until now, the government has not intervened in management by leveraging the shares of companies it has acquired through payment in kind.
This method of equity investment could also evolve into the establishment of special purpose companies (SPC) in the form of consortia with small and medium-sized enterprises and venture companies, a senior official from the Ministry of Economy and Finance explained.
This official noted, 'If an SPC is established to create a solar power generation complex in Haenam, Jeonnam, and financial support is requested from the fund, it is also possible for the government to support funds on the condition that it receives 30% equity in the SPC.'
Plans are being actively considered to offer low-interest loans at around 2% for facility investment funds to expand production for medium and large corporations. Considering that the interest rates are currently in the range of 4% to 5% when corporations borrow funds for facility investment, this could reduce the interest burden by more than half.
It can also be used as local development funds to foster local economies. It is said that the fund could be used for facility expenses of corporations located in specialized districts for secondary batteries and power semiconductors in the southeastern region or future vehicles and bio-specialized zones in the southwestern region.