[First Budget of Lee Administration] 4.2 Trillion Won Concentrated Investment in RE100 Industrial Complexes & Next-Generation Power Grids

Trade Response Budget Increased 70-fold to Support U.S. Tariff Negotiations... Special RG Guarantees for Small and Medium-Sized Shipbuilders

Fostering 'K-Export Star 500'... Up to 1 Million Won Subsidy for Switching to Electric Vehicles

119.6 Billion Won Allocated for Presidential Office in Sejong & National Assembly Sejong Building, Including Design Launch

Taebaek Wind Hill (Taebaek=Yonhap News) Reporter Baek Seung-ryeol = Wind Hill in Changjuk-dong, Taebaek-si, Gangwon-do. 2024.8.1 srbaek@yna.co.kr

The government will invest a total of 4.2 trillion won next year for the creation of RE100 (100% renewable energy use) industrial complexes and the construction of next-generation power grids, a 50% increase from this year.

The trade response budget for follow-ups to U.S.-Korea tariff negotiations, such as the Maritime Alliance for Security and Global Alliance (MASGA), has been increased 70-fold from this year (30 billion won) to 2.1 trillion won.

The government held a cabinet meeting on the 29th and approved the 2026 budget plan, the first budget of the Lee Jae-myung administration.

◇ 4.2 Trillion Won for RE100 Industrial Complexes & Next-Generation Power Grids... New Subsidy for Electric Vehicle Conversion

First, the government will invest 4.2 trillion won—an increase of 1.4 trillion won (50.0%) from this year—into creating RE100 industrial complexes and building next-generation power grids.

Loans and subsidies for power generation facilities shifting from fossil fuels to new and renewable energy such as solar and wind power will be increased from the existing 500 billion won to 900 billion won.

In areas where the power grid is saturated, the government will support the installation costs of Energy Storage Systems (ESS) to build AI-based distributed power grids, thereby strengthening the stability of power supply and demand.

The government will also foster the next-generation power grid industry by building the necessary infrastructure for RE100 industrial complexes and demonstrating microgrids (small-scale intelligent power grids that produce, store, and consume power locally).

To achieve carbon neutrality, support will be provided to 201 companies for the adoption of greenhouse gas reduction equipment, and 17,000 measuring devices will be added to small business sites.

A subsidy of up to 1 million won will be provided for switching from internal combustion engine vehicles to electric vehicles, and a 100 billion won zero-emission vehicle infrastructure fund will be established.

To revitalize corporate green investment, 800 billion won in policy financing, including low-interest loans and guarantees, will be supplied.

The total budget for energy transition and accelerating carbon neutrality, which encompasses all these measures, will be 7.9 trillion won, an increase of 1.9 trillion won from this year (6 trillion won).

Merger of HD Hyundai Heavy Industries and HD Hyundai Mipo... Strengthening Shipbuilding and Defense Capabilities (Seoul=Yonhap News) Ahead of the launch of 'MASGA,' a Korea-U.S. shipbuilding cooperation project, HD Korea Shipbuilding & Offshore Engineering, the intermediate holding company for shipbuilding under HD Hyundai, has begun business reorganization.

The move aims to strengthen global competitiveness in shipbuilding and defense through economies of scale by merging two of its three shipbuilding affiliates (HD Hyundai Heavy Industries and HD Hyundai Mipo). Pictured are the yards of HD Hyundai Heavy Industries (top) and HD Hyundai Mipo. 2025.8.27 [Provided by HD Korea Shipbuilding & Offshore Engineering. Resale and DB prohibited] photo@yna.co.kr

◇ Trade Response Budget Increased 70-fold... Design Launch for Presidential Office and National Assembly in Sejong

The trade response budget, which supports follow-up measures to the U.S.-Korea trade agreement concluded on the 30th of last month (local time), will be increased 70-fold from 30 billion won to 2.1 trillion won.

Of this amount, 1.9 trillion won is newly earmarked to implement the total $350 billion (approx. 487 trillion won) U.S. investment package, which includes the 'MASGA' project proposed by Korea to the U.S.

The U.S. investment package is expected to primarily involve direct investment, loans, and guarantees for projects that the U.S. strategically intends to foster, such as shipbuilding and semiconductors. To support this without setbacks, 1.9 trillion won will be used to bolster the capital of policy financial institutions such as the Korea Development Bank, Export-Import Bank of Korea, and Korea Trade Insurance Corporation.

70.8 billion won has been allocated to establish a Korea-U.S. technology cooperation center for shipbuilding industry collaboration (like 'MASGA') and to strengthen the Maintenance, Repair, and Overhaul (MRO) capabilities of small and medium-sized shipbuilders for naval vessels.

In addition to policy finance package support, emergency support vouchers will be provided to companies to compensate for tariff-related damages.

200 billion won in special Refund Guarantee (RG) support will be provided to small and medium-sized shipbuilders, and the investment in the defense export support fund will be increased from 20 billion won to 30 billion won.

100 promising domestic small and medium-sized enterprises (SMEs) with high business potential will be selected annually and fostered as 'K-Export Stars 500.'

Support volumes such as local marketing and tech/logistics vouchers, overseas certification, and funds for the globalization of export companies will also be significantly expanded.

Investment subsidies will be provided to small and medium-sized firms producing key items for high-tech strategic industries (materials, parts, and equipment), and loans for overseas resource development to secure core minerals will be increased from 39 billion won to 71 billion won.

A total of 1 trillion won will be invested in specialized support for regional strategic industries such as shipbuilding, energy, and advanced science to build growth hubs in local regions.

Through this, the southeastern region will be supported with a focus on shipbuilding and defense, including naval vessel MRO and the 'K-Shipbuilding Talent & Innovation Valley.'

The southwestern region will specialize in energy businesses such as AI-based distributed power grids, while the Daegu-Gyeongbuk region will focus on humanoid (human-like AI robot) projects, including a 'National Robot Test Field.'

The central region will focus on fostering advanced science and industry, such as semiconductor back-end process testbeds.

The subsidy for promoting local investment for this purpose will be increased to 255.3 billion won, and 177.2 billion won will be allocated for technology development through industry-academia-research collaboration.

1.7 trillion won will be distributed for the construction of metropolitan and urban railways to ensure the rapid establishment of regional growth hubs, and 100 billion won will be invested in responding to aviation accidents such as runway excursions and bird strikes.

Efforts to build the Presidential Office and the National Assembly building to complete Sejong City as the administrative capital will also be accelerated.

The budget for the Sejong National Assembly and the Presidential Office will be tripled from 39.5 billion won to 119.6 billion won, which includes land purchase and design costs.

International Design Competition Launched for Presidential Office in Sejong and National Assembly Sejong Building (Sejong=Yonhap News) Reporter Bae Jae-man = Kang Joo-yup, head of the National Agency for Administrative City Construction, announced on the 28th at the joint briefing room of the Government Sejong Complex that the approximately 2.1 million square meters of land south of Wonsusan and Jeonwolsan mountains in the center of Sejong City will be designated as a 'National Symbol Zone.' He stated that the Presidential Office in Sejong, the National Assembly Sejong Building, and civic spaces will be constructed there, and that a master plan will be developed through an international competition. 2025.8.28 scoop@yna.co.kr