Korea aims for $10 billion in overseas investment development by 2030

Economy

Published: 23 Jul. 2024, 17:26

Korea aims for $10 billion in overseas investment development by 2030

Almaty Ring Road in Kazakhstan developed by Korea Expressway Corporation (KEC) and SK ecoplant [KEC]

Korea aims to clinch overseas investment development projects worth $10 billion by 2030 with government-led public-private partnerships.

The Ministry of Land, Infrastructure and Transportation announced the project Tuesday during an economic ministerial meeting at the government complex in central Seoul.

Investment development projects, as defined by the ministry, are overseas development projects run on a design-build-finance-operate procurement model. In contrast to a standard contracted project, the operator of an investment development project holds an equity stake, taking on a higher potential risk and return.

Domestic construction companies have largely played the role of simple contractors so far, but the government plans to bolster public-private partnerships between state-run organizations and private companies to enhance the global competitiveness of local players. Since public agencies have a favorable track record when it comes to infrastructure ventures and are able to secure loans at lower interest rates, partnerships involving them have a better shot at winning overseas projects.

Moreover, a new fund worth 1.1 trillion won ($793 million) will be established to help domestic companies win overseas construction projects involving power plants, infrastructure facilities and smart city projects.

Meanwhile, Finance Minister Choi Sang-mok, who chaired the Tuesday meeting, addressed recent heavy rains that flooded certain regions of Korea, warning of a possible acceleration of inflation this month.

“Due to abnormal weather conditions and a base effect, consumer prices may see a temporary surge in July,” Choi said in his opening remarks.

“Consumer prices are expected to continue to stabilize starting in August when the general conditions, including the supply of agricultural products, will begin to improve. The government will remain alert and do its best to ensure price stability,” said the minister.

The government will supply more than 300 tons of napa cabbages and white radishes daily in July to rein in soaring fresh agricultural product prices, as flooding caused by the recent heavy rains has hampered production in certain regions.

Korea's headline inflation has been slowing as of late. Consumer prices rose 2.4 percent on year in June, the lowest level since July 2023.

Choi said that the government will bolster support for stable employment, especially for financially vulnerable demographics. The plan is to promptly execute a budget of 4.6 trillion won allotted for employment support in the latter half of the year, which will provide subsidies for low-income employees and incentivize regional hiring.

The ministry also announced new programs to expand senior living communities and housing as well as improve government administrative services to ease inconveniences in daily lives, including digitalizing the application process for Korea's college entrance exam.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]