The government decided to supply 7.1 trillion won in policy finance to support export companies squeezed by a cash crunch due to the Middle East crisis. It will also inject an additional 220 billion won to expand policy finance for renewable energy projects. The step aims to reduce overseas energy dependence through a green transition.
The Ministry of Planning and Budget said on the 31st that the Cabinet approved a supplementary budget bill with these measures.
The supplementary budget allocates 650 billion won for export policy finance. Leveraging that money will release a total of 7.05 trillion won in market liquidity. Specifically, 350 billion won will be supplied through the Korea SMEs and Startups Agency (KOSME) as loans for emergency management stabilization funds and new-growth market entry support funds.
The remaining 300 billion won will be split into 100 billion won each and used as resources for special guarantees by the Korea Credit Guarantee Fund (KODIT) (2.5 trillion won) and the Korea Technology Finance Corporation (KOTEC) (1.2 trillion won), and for insurance by the Korea Trade Insurance Corporation (3 trillion won). The Korea Trade Insurance Corporation will divide this funding to support export-company liquidity (800 billion won), raw material import payments (650 billion won), and entry into new markets (1.35 trillion won).
In the energy transition field, an additional 220 billion won will be poured into financial support for renewable energy. Combined with the main budget (640 billion won), this year's budget rises to about 860 billion won. The government said it will allocate 120 billion won for solar power and 100 billion won for offshore and onshore wind power, using them as priming funds to draw private investment in the shift to renewable energy.
Also, to allow ordinary households to join the energy transition, the "apartment balcony solar dissemination support project" was created for the first time in this supplementary budget. It will provide 25 billion won to 100,000 households. The program to create "sunlight income villages," in which village residents form a cooperative to build solar power plants on idle land and share power sales revenue, will be sharply expanded from 150 to 700 sites. Backing will include 16 billion won to support 400 billion won in financing through interest subsidies and direct loans. An additional 90 billion won was also set aside to expand the supply of electric cargo trucks mainly used by small business owners (from 36,000 to 45,000 units).
Stabilizing supply chains will cost 700 billion won. Of that, 500 billion won will support naphtha import costs, a key feedstock for petrochemicals, and 200 billion won will be used to secure an additional 1.3 million barrels for the strategic petroleum reserve. The plan is to achieve ahead of schedule the 2030 reserve target of 1.026 billion barrels.