30 Trillion Export Finance Support for Green and Digital New Deal Over 5 Years

Government Announces 'K-New Deal Globalization Strategy'
Full Support Including Export Finance and ODA Expansion
Digital Export Value from $180 Billion to $250 Billion

Minister Sung Yun-mo of the Ministry of Trade, Industry and Energy explaining the key points of the 'Green New Deal' at the Government Complex Sejong in Sejong City on July 16 last year. (Image source=Yonhap News)

[Asia Economy Reporter Moon Chaeseok] The government will support 30 trillion won in export financing for the Korean New Deal over the next five years.

The Ministry of Trade, Industry and Energy and the Ministry of Science and ICT announced the 'K-New Deal Globalization Strategy' on the 13th at the '26th Emergency Economic Central Countermeasures Headquarters Meeting and 9th Korean New Deal Ministerial Meeting.'

The core is to accelerate overseas orders by increasing export financing and official development assistance (ODA) support.

They divided the representative industries into seven sectors including green energy, and selected four key tasks each in the green and digital New Deal sectors.

30 Trillion Won Loan Supply Over 5 Years... Customized Orders by Four Strategic Markets Including Advanced and Emerging Markets

[Image source=Reuters Yonhap News]

In the green New Deal sector, strategic markets are divided into four and promising customized projects are identified to support exports and orders.

The strategic markets are divided into advanced mature markets (United States, European Union, etc.), emerging growth markets (Southeast Asia, Latin America, etc.), promising distributed power markets (Indonesia, Philippines, etc.), and energy diversification markets (Saudi Arabia, United Arab Emirates, etc.).

A 'Public-Private Joint Green New Deal Task Force (TF)' is established within the 'Overseas Order Support Council' led by the Ministry of Economy and Finance to provide project-specific support such as financial procurement, ODA, and consulting.

In advanced markets such as the United States, the plan is to lead joint research and development (R&D) and investment cooperation in renewable energy and electric/hydrogen vehicle sectors. Orders will be increased by utilizing private power generation.

In promising distributed power markets such as Indonesia, a 'microgrid project' combining new and renewable energy facilities and grid facilities will be promoted. In energy diversification markets such as Saudi Arabia, opportunities for exporting solar-linked desalination facilities will be explored.

Not only the order system but also financial support will be strengthened. Over the next five years until 2025, 30 trillion won (including digital New Deal) in export and order loans will be supplied. The loan limit will be expanded by up to 10 percentage points, and additional interest rate benefits will be provided. Mid-sized companies will receive a 0.3 percentage point reduction, and small and medium-sized enterprises will receive a 0.5 percentage point reduction.

The share of green New Deal ODA, where participation by small and medium-sized enterprises and mid-sized companies is high, will be expanded from 6.4% to 22.7%. The 22.7% level corresponds to the average of the Organisation for Economic Co-operation and Development (OECD). This will strengthen the foundation for entering developing country markets in the green New Deal sector.

A private-led 'Global H2 Alliance' will be newly established with the United States, United Kingdom, Canada, Germany, Australia, China, and others to expand multilateral hydrogen cooperation. Joint R&D and demonstrations are expected to be activated.

Support for Recognizing Achievements When Domestic 5G and AI Demonstration Results Are Presented for Overseas Expansion

In the digital New Deal sector, support will be provided so that domestic demonstration results in key areas such as 5G and AI in the data, network, and artificial intelligence (D·N·A) convergence industry can be used as references when expanding overseas.

Through the 'K-Digital Alliance' launching in the first quarter, proactive overseas expansion of leading-edge companies encompassing digital and other sectors will be promoted. The number of digital government cooperation centers will be increased from three to seven.

Support for orders in the smart social overhead capital (SOC) sector will be provided through smart city cooperation projects underway in 12 cities and a global plant, construction, and smart city fund worth 1.5 trillion won.

The rapidly growing non-face-to-face industry after the COVID-19 pandemic will pursue overseas market entry with a localization strategy that collaborates with local companies and capital from the early stages of business.

In addition, expansion of international joint research on core technologies such as 5G and cybersecurity with the United States and EU, promotion of digital ODA such as remote education, and application of AI ethics standards and legislative roadmaps to digital policy agendas such as AI and data will be pursued.

Investment in overseas expansion companies in the digital sector will also be increased to a total of 226 billion won. Global venture funds and digital media content specialized funds will be utilized.

An overseas expansion TF will be established within the 'Digital New Deal Public-Private Cooperation Meeting.' Overseas bases such as foreign missions and IT support centers in major strategic countries will be utilized as 'Digital New Deal Forward Bases' to build a comprehensive support system.

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