Export-Import Bank of Korea and K-SURE are expected to provide financial support along with increased credit lines, cuts in interest rate, lower insurance premiums, and other financial incentives to South Korean battery firms which are investing in North America
South Korea to offer $5.3bn worth loans and guarantees to support the investments made by South Korean battery firms in North America. (Credit: Lee Rosario from Pixabay)
South Korea will offer KRW7 trillion ($5.3bn) worth loans and guarantees to support its battery firms’ and material suppliers’ investments in facilities within North America through the next five years.
The financing aid has come as a part of the South Korean Trade, Industry and Energy Ministry’s announcement of the post-Inflation Reduction Act (IRA) public-private joint strategy for battery industry development.
Export-Import Bank of Korea and K-SURE are expected to provide financial support along with increased credit lines, cuts in interest rates, lower insurance premiums, and other financial incentives to the electric vehicle (EV) battery firms.
The support schemes for the firms will also include market penetration measures for lithium iron phosphate (LFP) batteries.
According to the Ministry, South Korean firms have commenced developing LFP batteries, with some ready for activating production lines.
The government seeks to start LFP battery projects worth more than KRW50bn ($37.9m) this year to help businesses penetrate international markets.
Besides, the South Korean government announced the plan to develop ‘mother factories’ in the country to obtain significant competitiveness in the domestic battery industry.
Through the next five years, three battery manufacturers plan to invest KRW1.6 trillion ($1.2bn) in next-generation batteries and develop a pilot line for all-solid-state batteries in South Korea.
Furthermore, the government is expected to push for a KRW150bn ($113.7m) next-generation battery research and development (R&D) prefeasibility study as part of an investment to secure advanced technology.
South Korea Trade, Industry and Energy Minister Lee Chang-yang said: “Public and private sectors must work together to solve major challenges to effectively respond to the rapidly changing post-IRA global landscape.”