Korea Trade-Investment Promotion Agency (KOTRA) has teamed up with World Bank Group to explore ways of raising a $100 million fund to finance projects in developing countries.
To this end, KOTRA and World Bank Group -- World Bank, International Finance Corp. (IFC) and Multilateral Investment Guarantee Agency (MIGA) -- jointly held the KOTRA-World Bank Group Forum on WBG Partnering with Korea’s Private Sector in Developing Countries at the Millennium Seoul Hotel in Seoul on Nov. 5.
The Session I panel discussion touched upon the topic of Multilateral Development Bank (MDB)’s roles in co-prosperity in developing countries, and ways of promoting cooperation with Korea. World Bank President Jim Yong Kim, KDB Financial Group Chairman & CEO Hong Kyttack, Korea Water Resources Corp. (K-water) President Choi Kye-woon, and Daelim Industrial President Kim Dong-soo participated in the session, which was chaired by President Lee Il-houng of the Korea Institute for International Economic Policy. They spoke about the WB’s role and plans for economic growth in developing countries; strategies on expanding overseas through Korean and foreign banks and implementation cases; hindrances and grievances Korean firms experience while tapping developing countries; ways of overcoming risks; and ways of promoting shared growth amongst large- and small-sized companies.
The topic of Session II was the World Bank, IFC, MGAS’s presenting of policies and examples.
Bert Hofman, the World Bank’s country director for China, Mongolia and Korea, spoke about Korea and World Bank’s ways of promoting cooperation in the private sector. MIGAS Korea Representative Ham Jung-lim gave a lecture on MIGA’s policies designed to provide support to ease risks related to the implementation of projects for building infrastructure of developing countries and related examples. Simon Andrew, country manager for East Asia and the Pacific touched on IFC’s provision of funds for sustainable investment in developing countries and success stories.
“The Reality is that the demand on projects of developing countries is on the surge, but there not a few projects that remain out of touch due to a lack of financing: a Korean company official on hand at the forum said,” he said. Hofman added that he will seek out partnerships with multilateral development banks such as IFC and MIGA.
Some pundits pointed out that Korean contractors need to change the way they carry out overseas projects, saying that they tend to take the EPC contract format, which is less risky but less profitable. In order to fix this issue, IFC supports the private sector’s investments into developing and underdeveloped countries. K-water received a fund and a guarantee from IFC and MIGA in 2012 to carry out a dam construction project in Pakisatan.
“It will be a great boon for companies seeking to make inroads into developing countries to receive funds from the World Bank Group and find ways of mitigating investment risks,” said Kim Sung-soo, head of KOTRA’s Marketing Strategy Division.