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“Busan Future Industry Transition Fund No.1” Established – Full-Fledged Push for High-Value Industrial Innovation

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Busan Metropolitan City (Mayor Park Heong-joon) announced the successful establishment of the “Busan Future Industry Transition Fund No.1” master fund, worth KRW 55.1 billion, as a key milestone in transforming the local industrial structure and fostering future growth industries.

The City has swiftly achieved results just four months after officially launching the plan in February to establish the Busan Future Industry Transition Fund aimed at industrial transformation. The fund includes KRW 50 billion from a mid-sized business-specific fund supported by five major commercial banks, KRW 4.1 billion from the City, and KRW 1 billion from Korea Development Bank.

In collaboration with the Financial Services Commission, the City enhanced the fund’s financial stability by reinforcing subordinated investment alongside bank contributions, thereby reducing risk and establishing an institutional foundation that enabled Korea Development Bank’s participation in the fund launch.

Beginning this year, the City plans to create master funds worth KRW 55.1 billion annually for the next nine years. By matching these with private capital, sub-funds of over KRW 250 billion annually—or KRW 2.3 trillion in total—will be formed incrementally.

Through this effort, large-scale policy funding will be reliably supplied to support new industrial transitions and upgrades of SMEs and mid-sized enterprises in the Busan-Ulsan-Gyeongnam region.

In particular, the fund will provide practical transition capital to help Busan’s key manufacturing sectors—such as shipbuilding equipment and automotive parts—overcome declining competitiveness and transform into advanced industries by incorporating digital and eco-friendly technologies.

The fund is expected to serve as a strategic tool to foster high-value-added industries and sustainable growth by supporting business transformation needs such as smart factory implementation, carbon reduction technology adoption, and conversion to future vehicle parts manufacturing.

The master fund will be managed by Korea Growth Investment Management, which will oversee the establishment and administration of sub-funds. The management firm will distribute the master fund’s capital into four sub-funds, thereby expanding the overall fund size. It will go beyond simple financing by actively supporting the value enhancement and success of investee companies through post-investment management and advisory services.

Additionally, project-based funds will be formed in parallel to increase regional investment ratios and quickly identify local investment opportunities.

Starting in July and August, the City will initiate the process of soliciting and selecting sub-fund managers. From September, it aims to expedite sub-fund formation and begin investment execution, with the goal of producing the first local investee company by year’s end.

To this end, the City has already built a collaborative network with major financial institutions, including local branches of the five major banks, Korea Development Bank, and Busan Bank, as well as with business support organizations such as the Busan Chamber of Commerce and Industry, to identify potential investee companies.

During the sub-fund solicitation process, the City will also encourage participation from local fund managers and offer incentives to attract outstanding fund managers from the Seoul metropolitan area, aiming to ensure successful fund establishment.

Meanwhile, over 200 representatives from local companies and financial institutions attended the fund information session held on June 24. Since then, related inquiries have continued, reflecting growing interest and high expectations among local businesses.

This strong interest demonstrates that local companies are acutely aware of the need for funding to transition to new industries and secure future competitiveness, and that they view the fund as a practical breakthrough for advancing into high-value industries.

Mayor Park Heong-joon stated, “With the high expectations and energy of our local companies, we aim to produce the first leading investee company for industrial innovation within this year and spread a wave of innovation throughout the regional industry through the successful launch of this fund.” He added, “Through this, we will build a virtuous cycle of regional capital, drive tangible economic revitalization, and lay the groundwork for Busan to independently design its own future.”