The Ministry of Finance and Ministry of SMEs and Startups said Monday they will invest $15 million (18.4 billion won) in the Asian Development Bank’s upcoming new fund program to help early-stage startups here to expand their business into Southeast Asia regions. 

The Ventures Facility Investment Fund is aimed at financing small and medium-sized companies in business sectors like agriculture, public sanitation or fintech that foster sustainable economic growth in Southeast Asian countries. It is a type of social impact investing, which seeks for positive impacts on social problems alongside financial gain, the ministry said. 

The Korean government will finance the ADB’s new fund through its two separate funds -- a fund of funds operated by the Ministry of SMEs and Startups as well as e-Asia and Knowledge Partnership Fund, set up by the Finance Ministry to support developing nations in the Asia-Pacific region. Each fund will invest $10 million and $5 million, respectively. 

The Ministry of SMEs and Startups’ fund of funds -- a mutual investment vehicle that contains different types of funds has continued social investing since 2018, but has not yet invested in the international financial institution, the ministry officials said. 

Korean companies focusing on quarantine services or other promising social ventures will further get a boost from the government-led investment in terms of exports since the new fund will also finance domestic firms, which plan to expand its business into Southeast Asia regions. 

The total amount to be deposited in the fund will reach $60 million. Along with the Korean government, Finland, Denmark’s Climate Investment Fund and the Nordic Development Fund -- the joint development finance organization consisted of the five Nordic countries including Denmark, Finland, Iceland, Norway and Sweden also plan to invest in $20.2 million, $10.3 million and $10 million, respectively.

“The government expects its investment in the ADB fund will extend local startups’ reach in Southeast Asian countries, strengthening a strategic partnership with the regional development bank,” said an official. 

The ADB’s new fund program will be launched during its annual meeting held in Songdo, Incheon, on Sept. 18-21.

Meanwhile, the government officials will co-host an investment relations conference with the ADB, introducing venture companies and startups in different industries.

Launched in 1968, the ADB has stepped up efforts to tackle poverty issues and promote environmentally sustainable and inclusive growth in the Asia-Pacific region, with participation by a total of 68 member countries including Korea, the United States and Japan as well as China. 

By Choi Jae-hee (cjh@heraldcorp.com)