National Growth Fund to Provide 1 Trillion Won for Yawol Offshore Wind and Others... Enhanced Risk and Post-Investment Management

Support for First Commercialization of 8MW Domestic Offshore Wind Turbines
18.9 Trillion Won Approved as of End-September
Annual Target of 30 Trillion Won Likely to Be Achieved Ahead of Schedule

The National Growth Fund has decided to provide approximately 1 trillion won in support for five projects, including the Yawol Offshore Wind Power Project, which utilizes domestically produced turbines. As a result, the fund had approved a total of 18.9 trillion won in funding by the end of September, and it is expected to achieve its annual approval and fund formation target of 30 trillion won ahead of schedule within the year.

According to the Financial Services Commission on September 17, the National Growth Fund Fund Management Deliberation Committee approved funding for five initiatives, including the Yawol Offshore Wind Power Project and D&Solutions’ project to advance artificial intelligence transformation (AX) in manufacturing.

Among these, the Yawol Offshore Wind Power Project involves building a 104MW offshore wind farm near Nakwol-myeon, Yeonggwang-gun, South Jeolla Province. Of the total project cost of 757 billion won, the Advanced Strategic Industry Fund within the National Growth Fund will provide 130 billion won through a project financing (PF) loan. The remaining 627 billion won will be borne by private financial institutions and power generation companies.

For the Yawol Offshore Wind Power Project, thirteen domestically produced 8MW-class offshore wind turbines developed by Doosan Enerbility will be installed. This marks the first time in Korea that large-scale offshore wind turbines developed domestically have progressed beyond the research and demonstration stages to actual application in a commercial power generation complex.

These turbines were developed through the “Development of 8MW-Class Large-Capacity Offshore Wind Power Generation System” project led by the Korea Institute of Energy Technology Evaluation and Planning since 2018, and were installed at the Yeonggwang demonstration site in 2022. The Financial Services Commission expects that this project will help the domestic turbines gain actual commercial operation track records, supporting future entry into overseas markets.

This project was identified through structuring led by Hana Bank and IBK Industrial Bank of Korea, and linked to support from the National Growth Fund. By participating via the Advanced Strategic Industry Fund, the overall financing cost is reduced and the viability of the project is enhanced.

Additionally, the National Growth Fund will provide a 150 billion won low-interest loan to D&Solutions, a precision machine tool manufacturer, for its advanced manufacturing AX enhancement project. D&Solutions plans to establish a research and development (R&D) center in Bucheon, Gyeonggi Province, and develop smart machines capable of real-time analysis and control of vibrations, temperatures, and tool conditions in machine tools using artificial intelligence technology.

Hwashin, an automotive parts manufacturer in North Gyeongsang Province, will receive 25 billion won to expand its electric vehicle battery pack case production line. PKC, based in North Jeolla Province, will receive 12 billion won to expand high-purity chlorine gas production facilities for semiconductor etching processes. Connec, located in South Chungcheong Province, will be provided a 32 billion won loan to establish a mass-production line for lightweight structural frames for humanoids.

With this round of approvals, the fund’s cumulative total of approvals and formations from January to September this year has risen to 18.9 trillion won: 2.83 trillion won in direct investment, 1.59 trillion won in indirect investment, 7.62 trillion won in infrastructure investment and financing, and 6.86 trillion won in low-interest loans.

The proportion of funding allocated to regions outside the capital area stood at 44.7% based on approval amount, surpassing the policy target of 40%. Considering the indirect investment funds expected to be formed in the fourth quarter, the Financial Services Commission predicts the fund will reach its annual approval and formation target of 30 trillion won sooner than planned.

Meanwhile, as the scale of investment by the National Growth Fund expands, the Financial Services Commission will establish both a Risk Management Committee and a Post-Investment Management Committee. The Risk Management Committee will conduct prior assessments of risks related to investments, including financial, reputational, governance, legal, and community acceptance issues. The Post-Investment Management Committee will oversee funding execution and recovery after investment. Both committees are scheduled to become fully operational starting in October.

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