The Korean government plans to establish a mother fund worth 300 billion won this year, aiming to support regional revitalization projects totaling 3 trillion won. This initiative is designed to maximize regional economic activation effects, such as job creation, by encouraging various types of fusion and convergence projects. On February 5, during a national policy task-related ministerial meeting and other key economic meetings, the Ministry of Strategy and Finance announced the “Regional Revitalization Investment Fund’s First-Year Achievements and Future Strategies.”
Launched last year, the Regional Revitalization Investment Fund uses private capital and resources to invest in large-scale convergence projects desired by local regions. The mother fund, established with contributions of 100 billion won each from government finances, the Local Extinction Response Fund, and the Industrial Bank, amounts to 300 billion won. This fund, in turn, helps create subsidiary funds through private investor contributions to support projects led by local governments and private sectors. The initiative aims to accelerate projects by exempting preliminary feasibility studies and ensuring stability through special loan guarantees from the Housing and Urban Guarantee Corporation.
By selecting a management company for the mother fund on February 3rd, the government plans to complete the new establishment by April. Additionally, a revision of the Local Fund Act is in progress to strengthen the funding basis of the Local Extinction Response Fund within the first half of this year. The government expects a leverage effect of 10 times the fund amount, supporting projects valued at 3 trillion won through this parent-subsidiary fund structure.
Institutional and administrative support will be enhanced to ensure the fund functions as a driving force for regional development. Support will be given to municipalities to identify fusion projects that can maximize job creation and industrial ecosystem formation. Research contracts related to this will be issued in the first half of the year, investing 1 billion won in consulting and education for municipalities through specialized agencies. Selected projects will be expedited by waiving local financial investment reviews.
In terms of special guarantees for fund-dedicated loans, an annual guarantee limit of 2 trillion won has been set. There is a recognized need to secure sufficient guarantee capacity to encourage private lenders’ participation and strengthen profitability. The government plans to establish collaboration systems with other policy funds for new project identification and joint investments. Furthermore, through the “Regional Revitalization Investment Development Institute,” continuous support will be provided for holding investment briefings and academic seminars.
The government evaluated that the five projects selected last year yielded investment effects worth approximately 25 trillion won. These projects included the Chungbuk Danyang Station Complex Tourist Zone (68 billion won), Gumi National Industrial Complex advancement (87.6 billion won), Yeosu LNG Terminal (1.4362 trillion won), Gyeongju Hydrogen Fuel Cell Power Plant (771.6 billion won), and the Chungnam Global Horticulture Complex Phase 1 (130 billion won). Private investment has been completed in three projects, with plans to continue in the first half of the year for the remaining projects. The leftover mother fund (55.6 billion won) is set to be exhausted before the new fund launches this year.