Korea Development Bank (KDB) will create a fund that will spend 5 trillion won (US$4.55 billion) per year over the next three years to spur local businesses to increase facility investment and share their risks through joint investment, the financial regulator said Tuesday.

"As part of the government-led economic revitalization plan, we will run a 5 trillion won program from next year to 2017 to promote corporate investment and ease their burden," said the Financial Services Commission (FSC).

The fund will invest in companies ranging from small and medium-size enterprises to large companies in 17 industries, including information technology, software, biotechnology, next-generation semiconductors and renewable energy.

"The KDB fund will participate in big investment projects that are too risky for a single corporation to afford," an FSC official said. "We expect the fund to induce 30 trillion won in new investments over the next three years."

The new fund will be allowed to hold up to a 30 percent stake in a company or to buy corporate bonds. This is a different approach from the KDB extending loans for facility expansion.

"The previous funds have focused on corporate loans and failed to ease companies' investment risks," said a KDB official. "We will encourage companies to go ahead with their facility investment without the heavy burden."

The KDB will survey potential companies in the first two months of 2015 and complete the investment program within the first half of the year, he added.

South Korea's facility investments have suffered a long slump throughout 2014 due to contraction in local demand and investment in the aftermath of April's deadly ferry disaster.

Facility investment fell by 5.2 percent and 1.1 percent in the first and second quarter, respectively, and plunged 10.6 percent in August alone. (Yonhap)