Woori Bank will participate as the largest investor in the "Future City Fund," designed to support the redevelopment of aging planned cities. The move aims to provide a stable and early supply of initial project funding essential for the redevelopment of Korea's first-generation new towns.
Woori Bank said Tuesday it will commit 480 billion won ($350 million) to the 600 billion won first mother fund, part of a broader 12 trillion won "Future City Fund" project. Linked with guarantees from the Korea Housing & Urban Guarantee Corporation (HUG), the fund plans to supply up to 20 billion won in initial project funding per site at low interest rates.
The fund was established under government leadership to address the aging problems of first-generation new towns, including Bundang, Ilsan, Pyeongchon, Sanbon and Jungdong, which encompass 530,000 households requiring redevelopment. It is designed to mitigate the high-interest funding risks of existing redevelopment projects. Woori Asset Management will manage the fund.
Major investors, including Woori Bank, have completed all investment agreements for the fund's formation. The "Future City Fund" will operate on a capital call basis, with funds deployed as needed. Funding will be disbursed once the first borrower (project site) is selected among the leading district zones within the first-generation new towns and a financing request is submitted.
"Through our participation in the Future City Fund, we have resolved the initial funding difficulties of aging new town redevelopment projects and established a foundation for stable project execution," said Lee Jin-kyung, team leader of Woori Bank's Structured Finance Department.
