South Korea’s climate ministry has announced that it will invest KRW60 billion (US$41 million) in government funds this year into a green infrastructure overseas investment vehicle, aiming to accelerate the country’s low-carbon transition and support domestic firms expanding abroad.
The contribution will be channelled into the Green Infrastructure Overseas Export Support Fund, which is expected to mobilise around KRW100 billion (US$68.5 million) in total new investment once private capital is added, said the Ministry of Climate, Energy and Environment in a statement on Thursday.
“The fund focuses on overseas projects in carbon reduction, energy transition, circular economy and water infrastructure, and is the only policy-backed investment fund in South Korea dedicated exclusively to new green projects abroad,” said the ministry.
Unlike conventional financial investments, the fund is structured to link investment decisions with business participation by South Korean companies, including equipment supply, engineering, procurement and construction (EPC), and long-term operation and maintenance services.
Launched in October 2024 under the state-backed fund-of-funds framework, the green fund will reach a total size of KRW509.2 billion (US$349 million) by 2029, combining KRW300 billion (US$205 million) in government capital with KRW209 billion (US$143 million) from private investors.
It will be split into two blind sub-funds worth about KRW417.2 billion (US$286 million) won and a project-based sub-fund of around KRW92 billion (US$63 million), which will invest directly in individual overseas projects. Blind funds, where investments are made at the discretion of fund managers rather than pre-selected assets, are widely used in the global energy transition sector.
As of the end of last year, the fund had committed KRW146 billion (US$100 million) across five overseas projects, including a KRW35 billion (US$24 million) investment in a green ammonia production facility in the United States in December 2024, a KRW2 billion (US$1.3 million) investment in a biodegradable bioplastics export company in June 2025, a KRW42 billion (US$28.8 million) energy storage project in the United States in August 2025, a KRW43.5 billion (US$29.8 million) investment in an eco-friendly vessel project in the United States in November 2025, and a KRW23.7 billion (US$16.2 million) energy storage project in Japan in December 2025, the ministry said.
The ministry added the shift toward project-level investments marks an expansion beyond traditional blind fund investments and enhances policy credibility for overseas project sponsors when government-backed capital is involved.
The initiative is expected to generate more than KRW4.9 trillion (US$3.3 billion) in overseas orders and exports for South Korean firms, while enabling more than 100 small and mid-sized companies to participate in global green value chains alongside larger conglomerates.
The ministry said it will continue policy support to help domestic companies expand overseas while contributing to the country’s emissions reduction targets and strengthening international climate cooperation.
“The 509.2 billion won green fund will serve as a key policy tool for South Korea’s green transition strategy, which will be fully implemented from this year,” said Jung Eun-hae, the ministry’s director-general for international cooperation. “The government will continue to provide not only investment support but also on-the-ground policy backing to help Korean companies expand more actively into global green markets.”
The move comes as South Korea seeks to align its industrial strategy with its climate commitments, including a goal of achieving carbon neutrality by 2050 and cutting greenhouse gas emissions by 40 by 2030 from 2018 levels under its nationally determined contribution to the Paris Agreement.
Seoul has also signalled plans to raise its mid-term ambition by submitting an updated 2035 emissions reduction target later this decade, while expanding renewable energy, energy storage and low-carbon industrial technologies as part of its green growth strategy.
