South Korea has unveiled yet another financial package aimed at boosting its domestic shipping industry.
The government is providing KRW 820bn ($690m) to help owners modernise ageing cargoship and ferry fleets.
The Yonhap news agency reported that the cash is aimed at smaller companies and will allow them to build 59 new vessels.
Of these, 38 will be cargoships and 21 will be ferries, according to the Financial Services Commission (FCS).
An owner will be able to borrow up to 60% of the contract price.
Banks and the state-run Korea Ocean Business Corp fund will guarantee more than 95% of the loans.
Another government lender, Korea Development Bank, also separately provides 20% of the financing needed to build a ship.
Big scope for renewals
South Korea has 58 smaller shipping companies operating 166 passenger vessels.
The FSC said another 780 companies run 2,013 cargoships on domestic routes.
The country has lowered the maximum age limit of ro-paxes from 30 years to 25 years, creating a demand for new ships.
At the end of 2018, 22% of domestic passengerships and 68% of cargo vessels were more than 20 years old.
The country has been throwing money at the shipping sector in recent years.
Last April, the industry ministry said it would spend KRW 70bn to support shipyards in newbuilding work, according to the Yonhap news agency.
The cash was earmarked for developing eco-vessels like those powered by LNG.
It followed measures announced in November 2018 to create a KRW 1.7 trillion fund to support yards and to invest KRW 2.8 trillion by 2025 to build infrastructure for LNG-fuelled vessels.
The state plans to order 140 LNG-fuelled ships by 2025.
The ministry was also due to increase the pot for refund guarantees for smaller shipbuilders to KRW 200bn from KRW 100bn.
South Korea is already facing strong criticism from Japan over state support for its shipbuilding industry.
