Korea Eximbank and Korea Industrial Complex Corporation sign a business agreement at Korea Eximbank Headquarters on May 3 in Yeouido, Seoul to establish a cooperation platform for promoting small and medium-sized Korean companies’ exports. Pictured from left are President Bang Moon-kyu of Korea Eximbank and Chairman Kim Jeong-hwan of Korea Industrial Complex Corporation. (Photo: Korea Eximbank)

The Export-Import Bank of Korea (Korea Eximbank) predicted on April 26 that Korea’s exports will reach $150 billion in the second quarter of this year, up 35 percent from the same period of last year.

The forecast was the highest since Korea enjoyed year-on-year export growth of 35.8 percent in the first quarter of 2010 shortly after the global financial crisis.

Korea’s Export Leading Index for the second quarter was 125.5, up 9 points from a year earlier, according to data released by Korea Eximbank.

Compared to last year, it rose by 4.4 points. Korea Eximbank forecasts exports in the second quarter will swell 35 percent compared to the same period last year due to economic booms and stimulus measures in the United States and China, the two main export markets of Korea and the base effect of the previous year when Korean exports plummeted.

In fact, Korea’s exports reached $146.5 billion in the first quarter, up 12.5 percent from $130.2 billion a year earlier. Corporate Korea has enjoyed a recovery since the third quarter of 2020.

The amount is also the highest quarterly export figure since the fourth quarter of 2018. Among the main 15 major items shipped overseas, Korea enjoyed spikes on 12 of them, including semiconductors and automobiles.

By region, exports to major jurisdictions, such as China, the United States, the EU and Vietnam all increased.

“Export growth will soar mainly in semiconductors, automobiles, and petrochemicals in the second quarter thanks to economic recoveries of major export markets such as China and the United States and the base effects of the same period of the previous year,” a Korea Eximbank official said.

“However, if a global economic recovery slows down due to a delay in vaccinations and the expansion of virus variants, the increase may slow down.”

In the meantime, Korea Eximbank announced on April 15 that it and the CGIF will each guarantee 50 percent of green bonds, worth one billion yuan (171.4 billion won) issued by Hanwha Solutions.

The Credit Guarantee and Investment Facility (CGIF) is a trust fund of the Asian Development Bank (ADB) established in November 2010 to guarantee regional bonds issued by companies in ASEAN countries, Korea, China and Japan for the development of the Asian bond market. Korea has a 14.3 percent stake in the CGIF through Korea Eximbank.

A green bond is a special purpose bond issued to finance eco-friendly and renewable energy projects to cope with climate change.

This is the second guarantee jointly provided by Korea Eximbank and the CGIF for bond issuance. Cooperation model between the two entities is considered a good example for Korean companies to follow in raising funds through bond issuance in Asia.

For reference, Korea Eximbank and the CGIF jointly supported CJ Logistics’ bond issuance for local subsidiaries in Singapore in March 2019.

Meanwhile, it was the first time Hanwha Solutions has issued green bonds. The company ranked seventh in the global solar energy market in terms of photovoltaic module production capacities last year.

The funds raised by the green bonds will be used to strengthen the company’s ESG management, increase the financial capital of its subsidiaries in China and other overseas countries producing solar cell and module products and make repayment of existing loans.

“Utilizing our wide global network including the CGIF, we will continue to provide various financial solutions to Korean companies in the renewable energy industry such as solar and wind power,” said another official at the bank.