Korea Development Bank said Wednesday it has signed a contract with private financial institutions to establish a fund worth 500 billion won ($418.8 million) for Korean shipping companies. 

The country’s largest policy bank inked a tripartite deal with Mirae Asset Securities and its affiliated Multi Asset Global Investments on the KDB-Mirae Asset Ocean Value Up Program, which aims to raise 500 billion won worth of investments for shipping firms.

KDB will finance 70 percent of the fund while Mirae Asset Securities will be responsible for the remaining 30 percent. Multi Asset Global Investments will be in charge of running the fund.

The latest program will supplement the $1 billion KDB Ocean Value Up Fund that was launched in March last year for the shipping industry. KDB was an anchor investor that funneled $700 million to the fund.

“It was not easy for KDB to find investors for the rest of the current fund due to worsening conditions in the shipping industry,” said a bank official. “With Mirae Asset, we have attained a stable source of investments that might better help struggling shippers.”

The KDB-Mirae Asset Fund will invest in new and used but healthy ships owned by medium-size shipping firms in the country. The policy bank also plans to invest in projects in which fiscally sound cargo owners hold long-term contracts with Korean-made ships.

The fund will help Korean shipping firms secure long-term competitiveness by encouraging them to receive licenses for high efficiency ships, the KDB said.

“We hope the new fund co-founded by a policy bank and leading private financiers will propose a new model of cooperation between financial policy and commerce,” said Lim Hae-jin, vice president of KDB.

By Song Su-hyun (song@heraldcorp.com)