South Korea' Financial Services Commission has announced 820 billion won ($690 million) in funding to help modernize aging passenger boats and cargo ships.
According to a Yonhap, the package is meant to help smaller shipping companies build 59 new ships -- 21 passenger boats and 38 cargo vessels.
The Financial Services Commission announced that shipping companies will be reimbursed for up to 60 percent of the cost of the new vessels, and South Korea's state-run Korea Ocean Business Corp. will guarantee more than 95 percent of the loans.
The Korea Development Bank will also fund 20 percent of the cost needed for building a ship.
According to the report, the move is part of South Korea's efforts to strengthen maritime safety and boost the economy.
Finance Minister Hong Nam-ki said the financial package will provide opportunities for local small and medium-sized shipbuilders, which have been struggling with falling orders.
Currently, 58 smaller shipping companies operate 166 passenger vessels, including ferries, to transport about 15 million people between the South Korean mainland and its islands per year, the commission said.
The commission said 780 other shipping companies run 2,013 cargo ships on domestic routes.