South Korea and Israel will provide $4 million in research funds to small and medium enterprises in 2016 to promote close economic cooperation, the government said Monday.

The Ministry of Trade, Industry and Energy said Seoul and Tel Aviv will each foot $2 million to support joint projects by SMEs from the two countries.

The money will be used in areas like electronics, machinery, biotech and renewable energy. Companies picked can expect upwards to three years of support with maximum funding set at $1 million per project, it said.

"Support aims to help merge Israel's top-class prowess in original technology with South Korea's expertise in manufacturing and application fields," the ministry said.

The latest plan comes after past bilateral cooperation has led to headway being made in 27 business areas such as production machinery to make flat display screens, ship monitoring systems, and traffic camera modules.

The two sides have been engaged in joint research and development support from 1999 onwards, with the size of funds injected to support projects being marked up over the years.

Initially each side allocated $1 million.

State funding is given to the Korea-Israel Industrial R&D Foundation that is charged with The ministry, meanwhile, said companies interested in getting support must submit a project development plan, involving an Israeli partner, by Feb. 1, 2016, with the foundation to select companies to receive assistance in May. (Yonhap)