KB Financial Group said on Wednesday it will form the roughly 1 trillion won ($) "KB National Growth Infrastructure Fund" by pooling its investment capabilities.

The fund was created to steadily support national strategic infrastructure projects and serve as seed capital for private investment, in step with the government’s plan to push a 150 trillion won National Growth Fund that begins full-scale funding starting with the "Shinan Ui offshore wind power project."

KB Financial said major affiliates including KB Kookmin Bank, KB Insurance and KB Life Insurance will participate as investors in the "KB National Growth Infrastructure Fund." It will raise the full 1 trillion won entirely with 100 percent group capital. KB Asset Management will run the fund.

The fund adopted a "perpetual closed-end infrastructure fund" structure after the Financial Services Commission and the Korea Accounting Standards Board clarified accounting standards in August last year. Through a no-maturity, non-redeemable infrastructure fund structure, it lowered the burden of reflecting related valuation gains and losses in current profit and loss and eased earnings volatility from long-term investment in a large-scale fund.

Its main investment targets are domestic infrastructure development, construction and operation projects including regional balanced growth social overhead capital, digital infrastructure, energy infrastructure and a major transition to renewables.

In particular, the fund will include the "Yongin semiconductor cluster district energy project," one of the National Growth Fund megaprojects, as a key investment asset.

KB Financial will push stable investment across infrastructure, including energy and foundational facilities needed to support improving the national industrial structure and strengthening the growth and competitiveness of regional industries. Linked to the government’s "5 major hubs and 3 special" development strategy for national balanced growth, it will focus investment on improving regional infrastructure and expanding new SOC to support revitalising regional economies and creating quality jobs preferred by young people.

A KB Financial official said it was meaningful that the group created a structure that can operate a single 1 trillion won fund stably over the long term by combining the group’s infrastructure investment know-how with the investment and management capabilities proven by major affiliates in the market. The official said the fund is expected to serve as an opportunity to encourage long-term investment by the financial sector in SOC. The official added KB Financial will continue to fulfil the essential role of finance so that local regions, small and medium-sized firms and young people can grow together, while also enhancing the competitiveness of advanced strategic industries.