The Export-Import Bank of Korea (Korea Eximbank) announced on Sept. 28 that it will provide $45 million in financing for the Basic Trainer (KT-1B) Life Extension Project signed by Korea Aerospace Industries (KAI) and the Indonesian Ministry of Defense.
The financial support marks the first instance of support for the entire lifecycle of exported military aircraft, from the initial export of finished products to subsequent structural modifications to the aircraft.
The project will cover 12 of the 20 basic trainers which have been exported by KAI to Indonesia since 2003.
The goal is to disassemble the trainers, conduct a thorough inspection, and then reinforce their core structures, fuselage and wings, extending their design life by 50%.
The price of a life extension project is high, approaching the price of a single finished aircraft, showing high added value.
Korea Eximbank, prior to the contract, communicated its intention to provide long-term financing for up to 10 years, contributing to the successful contract for 12 aircraft at once.
The KT-1B Trainer exported by Korea Aerospace Industries (KAI) to Indonesia.
This financial support opened a new path for Korean companies to generate sustainable profits through long-term maintenance, repair, modification, and improvement projects, going beyond simply selling defense products, experts say.
“This financial support is a pioneering example of financial solutions for the aftermarket or MRO business, a new growth engine for the Korean defense industry,” a Korea Eximbank official said.
“This will help Korean companies secure a stable source of revenue and build a competitive edge that will remain unshaken even in the face of volatility in the new order-taking market.”
KAI has exported 236 aircraft to date. Korean defense companies are steadily accumulating an export track record for both ground and maritime defense products.
If Korea Eximbank proactively secures these high-value-added aftermarket business opportunities, the Korean defense industry is expected to enjoy even more stable growth down the road.
Railway Infrastructure Cooperation with Vietnam
Korea Eximbank announced that it held the final briefing on the Vietnamese Railway Knowledge Sharing Program (KSP) in Ho Chi Minh City, Vietnam on Sept. 30.
The Vietnam Railway KSP is a bilateral cooperation project jointly implemented by Korea Eximbank and Ho Chi Minh City’s Urban Railway Committee.
The project aims to provide policy advice on systematizing urban railway technical regulations, strategies for attracting urban railway investment and stakeholder role guidelines.
At the final report meeting, the KORAIL consortium, the project executing agency, presented the research findings from the nine-month KSP project and presented final recommendations for improving urban railway laws and regulations.
The KORAIL consortium’s key policy recommendations included the clear institutionalization of urban railway regulations and standards, plans for aligning urban railway construction resources with other budgets and plans for redesigning the roles and responsibilities of railway stakeholders including construction, supervision, and operation.
Consultations were held with relevant Vietnamese organizations to ensure that the recommendations are reflected in 10 urban railway lines currently planned by Ho Chi Minh City.
The final report meeting was attended by approximately 50 people, including Bui Anh Huan, Vice Chairman of the Urban Railway Committee of Vietnam, officials from Ho Chi Minh City’s People’s Committee, Finance Department, Construction Department, and the governments, public institutions, academia, and companies of both countries.
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