South Korea has announced that it is hoping to raise $1.58bn in private capital to target green growth-related industries, as well as offering governmental incentives and support.
In a statement issued by the Ministry of Strategy and Finance, both financing in the financial market and by the government are not fit for green growth-related industries because projects in the industries have a lot of uncertainties, and it will take long to realize return on investment in those projects.
The government will introduce a certification system to approve green technologies and projects, and verify companies involved in green growth related projects as green enterprises.
To promote R&D projects and their commercialisation, the government will increase fiscal support from 2tn won ($1.58bn) in 2009 to 2.8tn won ($2.2bn) in 2012, along with 300bn won ($2.37bn) funds set up by the KDB (Korea Development Bank).
SMEs doing projects in stage 1 will access fiscal funds exclusive, which will be expanded from 60bn won ($47m) in 2009 to 1.1tn won ($867.4m) in 2013.
Credit guarantee offered to green enterprises and green projects will also be increased almost three folds from 2.8tn won in 2009 to 7tn won in 2013.
To boost maturing industries, the green funds of 500bn won will be formed by the KDB and National Pension Fund in the last half of this year, along with long-term deposit products and green bonds launched by banks to attract private investors. The government will grant tax incentives on capital gains, with no tax on dividend up to 30m won, among others.
To support fully grown industries, 100bn won in carbon funds will be set up in October 2009, followed by carbon emission rights exchange which will be test run in 2011. To promote exports of eco-friendly industries and projects, the government will expand export financing from 1tn won in 2009 to 3tn won in 2013 in addition to increased government guarantee for exporters.
A detailed plan to support eco-friendly care and LED lighting has also been set up. Eco-friendly cares, which are in the commercialisation stage, will have 200bn won of project financing for facilities investment, according to a statement. In the case of LED lighting, 100 billion will be financed to help replace conventional lighting with LED lathing in public places.
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