State-run Export-Import Bank of Korea (Korea Eximbank) will funnel more than 800 billion won ($749.3 million) in shipping finance as a part of the state-sponsored program to revive the shipping industry following the collapse of Korea’s flag sea carrier Hanjin Shipping.

The fund will be given in the forms of loans and guarantees that the shippers can use to purchase new vessels, refinance existing debts and pay for operating expenses, said Eun Sung-soo, Korea Eximbank chairman and president during his meeting with shippers on Friday.

Eun said the bank has decided to allocate its first batch of financial aid to rejuvenate home-grown shipping companies and plans to increase supports by placing shipbuilding orders for environmentally-friendly and high-efficiency vessels.

The latest financial aid program is part of the government’s effort to restore the reputation of local shipping and shipbuilding industries struggling from the protracted global slump as well as the collapse of the country’s once leading container carrier Hanjin Shipping, which was also the world’s seventh largest. Earlier this month, it unveiled a five-year plan that includes aiding home-grown shippers in placing orders for 200 vessels with local shipyards over the next three years through Korea Maritime Corp., a new financing agency to be formed in July.

Korean shippers pin hopes on the government-led program and the new financing agency as the recovery in the global shipping industry has been slower than expected, and they have been struggling to raise funds from commercial lenders that have cut down their financial support for the shipping companies since 2013 due to the industry slump, according to heads of local shippers at the meeting on Friday.

“Shipping and shipbuilding are the country’s backbone industries,” said Eun. “The state will provide balanced supports for their mutual growth.”

By Lee Seung-yoon and Cho Jeehyun

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