TORONTO (Reuters) - The government of the Canadian province of Ontario is set to announce a plan worth more than C$200 million ($157.5 million) later on Wednesday to drive investment into emerging technology companies amid a credit market crunch that has made it tough to raise venture capital.

A government spokeswoman said the initiative will target companies in the clean technology, life sciences, and digital media and communications technology sectors. An official announcement is expected Wednesday afternoon.

News of the plan comes about a month after a report that found that financing activity in Canada’s venture capital market dropped to its lowest level in 12 years in 2008 as the economic downturn choked the flow of funds to small start-up companies.

Venture capital financing is the lifeblood of many early-stage companies. Without investors willing to shoulder the relatively high risk associated with start-ups, such companies can flounder long before delivering a product to market.

Last year, a total of C$1.3 billion in venture capital was invested, down from C$2.1 billion in 2007, according to the report by Canada’s Venture Capital and Private Equity Association and news and data company Thomson Reuters.

Aside from the drop in value of financings, the number of companies that received capital was also lower, falling to 371 from 412 in 2007.

($1=$1.27 Canadian)