S. Korea to fund humanitarian projects in North

South Korean President Park Geun-hye.

SEOUL - South Korea announced Tuesday state funding for humanitarian projects in North Korea for the first time since Seoul imposed tough economic sanctions on Pyongyang four years ago.

The South's Unification Ministry stressed the move did not impact the ban on direct state aid to North Korea that was introduced after the sinking of the South Korean naval vessel Cheonan in 2010.

But it will provide three billion won (S$3.6 million) in grants to civilian groups providing assistance to North Korea in such fields as agriculture, livestock and healthcare.

"It's the first step of its kind since the sanctions were imposed in 2010, but there will still be no direct government aid," a Unification Ministry official said.

The naval corvette Cheonan sank with the loss of 46 lives on the night of March 26, 2010 near the South's disputed Yellow Sea border with the North.

An investigation by a South Korean-led international commission concluded it had been sunk by a torpedo from a North Korean submarine - a charge Pyongyang has always angrily denied.

The administration of then president Lee Myung-Bak responded by freezing government-level interactions, trade and aid to North Korea.

Tuesday's announcement of indirect state financing came as President Park Geun-Hye - Lee's successor - launched a new committee, chaired by herself and tasked with preparing the path for eventual unification with the North.