Hong Kong has announced a new HK$2 billion (US$257.7 million) fund to encourage investment in local innovation and technology startups.

The Innovation and Technology Venture Fund will be used to co-invest in startups with private venture capital funds, which will have to put in an equal amount, said Government Chief Executive Leung Chun-ying in his annual Policy Speech today.

More support for startups were revealed with a HK$200 million (US$25.8 million) fund to invest in ICT startups. The fund has been created under Cyberport, the government’s incubation and co-working space.

“Cyberport will increase the incubation scheme quotas and establish new clusters for areas such as financial technology and e-commerce”, Leung added. It will increase the number of workstations and offices by 50% by next year.

Other key upcoming initiatives are around smart cities. Leung announced a HK$500 million (US$64.4 million) fund to finance projects that use technology and innovation to improve citizens’ daily lives.

Additionally, the new Innovation and Technology Bureau will study the development of a smart city, including intelligent homes, more open data and free WiFi services, he said. The unit will create policies to use Big Data and analytics to improve public services.

The government plans to also double the number of WiFi hotpots to 34,000 in the next three years. It wants to provide free WiFi at all public housing estates, and public hospitals, markets, parks, promenades, tourist spots, public transport interchanges and land boundary control points.

The speed of existing WiFi services will be doubled, and the government will work with schools to improve connectivity for online learning.