Ministry of Land, Infrastructure and Transport Launches 200 Billion KRW PIS Fund Early to Support Overseas Orders

Promotion of 1.5 Trillion KRW PIS Fund to Boost Overseas Orders
Overseas Construction Orders Reached 7.5 Billion USD Last Month, 6.3 Times Higher Than Same Period Last Year

Gas processing plant construction is underway in the Svobodny area of Amur Oblast, Eastern Siberia, Russia, on December 29 last year (local time). (Photo by Yonhap News)

[Asia Economy Reporter Moon Jiwon] The Ministry of Land, Infrastructure and Transport announced on the 6th that it will launch a 200 billion KRW scale Global Plant Construction Smart City (PIS) fund early this month. The ministry is also reviewing investment plans for a proposal-type fund and plans to generate early results through investments in the first project of this year.

Since last year, the government has been promoting the establishment of a 1.5 trillion KRW scale PIS fund as a measure to revitalize overseas orders. In October last year, the government and infrastructure public enterprises formed a 600 billion KRW scale mother fund, and based on this, they are recruiting private investors to establish sub-funds.

The sub-funds consist of a 300 billion KRW Plant fund, a 600 billion KRW Infrastructure fund, and a 400 billion KRW Smart City fund, in addition to the proposal-type fund that will be launched early. The Ministry of Land, Infrastructure and Transport plans to complete the formation of the sub-funds by finishing private investment recruitment by May.

Additionally, the ministry plans to quickly invest 500 billion KRW out of the 1.5 trillion KRW PIS fund this year to support the expansion of overseas orders. It is expected to support 7 to 8 projects by discovering projects in cooperation with the Korea Overseas Infrastructure & Urban Development Corporation (KIND).

Furthermore, the ministry plans to expand the Global Infrastructure Fund (GIF) 4 to 7 to a total scale of 400 billion KRW and invest more than 100 billion KRW from this year's raised amount to expand market entry into regions such as the New Southern and Northern regions.

Unlike the PIS fund, which consists of mother and sub-funds, the Global Infrastructure Fund is composed of individual investment funds, each with diverse purposes such as venture investment and regional specialization.

The 85 billion KRW scale venture fund of Global Infrastructure Fund No. 4 is pursuing relaxation of investment guidelines to enhance utilization. The system will be improved to activate fund utilization by easing investment conditions such as investment targets and investment amount limits.

Global Infrastructure Fund No. 7 (100 billion KRW) approved a 32 billion KRW investment in a solar power plant in Vietnam last January and is seeking projects for additional investments this year.

This year, the Ministry of Land, Infrastructure and Transport, led by KIND, will promote government-to-government (G2G) cooperation projects and investment development projects worth 20 billion USD. Government-to-government cooperation is a method of directly negotiating and proposing projects with overseas ordering agencies to support securing business rights for Korean companies.

Last month, the ministry and KIND held a joint cooperation meeting with the Bangladesh government, securing priority business rights for three projects (9.3 billion USD) including roads, railways, and power transmission lines for Korean companies.

In addition, government-to-government cooperation projects and investment development projects (10.7 billion USD) are being promoted in Paraguay, Sri Lanka, the United States, Russia, and other countries to actively support Korean companies in securing business rights and expanding overseas orders.

Meanwhile, last month, overseas construction orders amounted to 7.5 billion USD, a 6.3-fold increase compared to the same period last year and 2.4 times the average of the past five years. The ministry explained, "Our companies are performing well by winning plant projects in the Middle East and large airport projects in Asia, improving order performance."

This content was produced with the assistance of AI translation services.