S. Korea seeks to create 120 bln-won defense industry investment fund

SEOUL, Sept. 27 (Yonhap) -- South Korea will push to create a defense industry investment fund worth around 120 billion won (US$83.9 million) by 2025 to support defense firms specializing in artificial intelligence, drones and other areas, the state arms procurement agency said Tuesday.

Hana Bank -- a local institution chosen to manage research funds from the state-funded Defense Agency for Technology and Quality and Agency for Defense Development -- will make investments worth 60 billion won in total from 2023-25 for the creation of a parent fund, according to the Defense Acquisition Program Administration (DAPA).

The Korea Growth Investment Corp. has been selected to manage the parent fund and create three subordinate ones, which will attract a combined 60 billion won from private investors in the 2023-25 period. The subordinate funds will be run for some 10 years.

The country's first such policy fund is aimed at supporting small and midsized defense enterprises boasting cutting-edge defense technologies in various areas, including energy, aerospace and semiconductors, according to DAPA.

"The purpose of creating this fund is to improve innovativeness of the industry's ecosystem in response to changes in the overall environment of the defense industry," DAPA said in a press release.

The local bank and fund manager were selected through a public bidding process.

sshluck@yna.co.kr
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