The Korean New Deal Fund that the Moon Jae-in administration has ambitiously laid out for the next five years to come is made of three key pillars a fund that the government runs directly, a fund that's focused on developing infrastructure and a private fund.
The first fund, run by the government, will come to 16.8 billion U.S. dollars.
35-percent of it will be drawn from the government's budget, while the rest will come from state-run financial institutions and private financial firms.
The fund will be used to invest in projects like building hydrogen energy stations, developing hydrogen and electric vehicles, and building renewable energy facilities.
The government also plans to provide a tax incentive of 9-percent for investment funds that put 50-percent of their funds into New Deal-related infrastructure projects like digital infrastructure management systems and renewable energy generation districts.
The cap for receiving the tax reduction is roughly 168-thousand U.S. dollars.
As well as that, the government looks to encourage private firms to form investment funds of any type if they find attractive investment outlets relating to the New Deal initiatives.
The Moon administration says it will work to create the desired investment environment by, for example, getting rid of regulation.
"The New Deal Fund will have a win-win structure that provides a strong power engine for the Korean New Deal initiative while returning outcomes to the public. The government will work to quickly revise laws and prepare guidelines so that the fund can be out in the market as soon as possible."
The Korean New Deal initiative was announced back in July.
The overall aim is to foster green and digital sectors to create jobs and overcome the economic fallout from COVID-19.
Oh Jung-hee, Arirang News.