The South Korean government announced Thursday its plan to pump 96.2 billion won (85.6 million U.S. dollars) into building "green homes," or energy efficient homes across the country, reflecting the nation's intention to become a global leader in eco-friendly policies.

The funds will be spent on building 20,000 energy efficient homes that utilize solar energy, solar thermal heat, geothermal heat, fuel cells, and small-size wind power generators, the Ministry of Knowledge Economy said.

The investment will also support the expansion of "green villages," communities that apply renewable energy sources and eco-friendly policies, to nearly 70 across the country in this year alone, a huge jump from the previous year's 20 total, the ministry added.

The green home project, which has helped build 43,893 energy efficient homes so far, was first launched in 2004 under the grand plan of eventually building a total of 1 million homes with renewable energy sources by 2020.

The announcement came as South Korea enacted the "low carbon, green growth" law on Thursday, which calls for the country to spend 2 percent of its annual gross domestic product in developing eco-friendly businesses that will also lead to economic growth and reduction in greenhouse gas emissions.

Also, the new project is expected to contribute to the country's fulfilling its pledge last month to reduce greenhouse gas emissions by 20 percent from the projected emission levels of 2020compared to 2005.