Korea Eximbank Builds All-Round Financial Cooperation Network in Latin America

Korea Eximbank Chairman Bang Moon-kyu has a meeting with Colombian President Ivan Duque at the Presidential Palace in Bogota, Colombia, on March 22 (local time) to discuss ways to support projects in climate change responses, digital transformation, and electric vehicles, through the economic development. (Photo: Korea Eximbank)

The Export-Import Bank of Korea (Korea Eximbank) is bolstering its financial network in Latin America to help Korean companies land orders in this region in the post-COVID-19 era.

Eximbank Chairman Bang Moon-kyu had separate meetings with the presidents of Colombia and the Dominican Republic, as well as the chief of the Central American Bank of Economic Integration (CABEI) to discuss comprehensive cooperation measures for Korean companies’ advancement into Latin America’s infrastructure and energy sectors.

Chairman Bang met with Colombian President Ivan Duque at the Presidential Palace in Bogota, Colombia, on March 22 (local time) and discussed ways to support projects in climate change responses, digital transformation, and electric vehicles, through the Economic Development Cooperation Fund (EDCF).

On the same day, Korea Eximbank held an opening ceremony of its Bogota office. The ceremony was attended by Chairman Bang, Korean Ambassador to Colombia and Colombian Minister of Commerce and Tourism.

Shortly after the opening ceremony, Chairman Bang signed a $100 million loan agreement with Banco de Occidente Bank of Colombia, which specializes in leasing finance, at its Bogota office.

On March 24, Bang had meetings with Dominican President and CABEI President in Santo Domingo, the Dominican Republic. They discussed ways to support Korean companies to participate in LNG power generation and transportation infrastructure projects including metro and railway projects.

Prior to this, Chairman Bang signed a memorandum of understanding worth $100 million with BANDEX, an export credit agency of the Dominican Republic, to support Korean companies’ export deals in infrastructure projects such as LNG terminals and ports.

While countries like Spain, the United States, and China used to win major infrastructure projects in Latin America, it has been difficult to fund such infrastructure projects due to worsening fiscal conditions of the governments, following COVID-19.

Under the circumstances, Korea Eximbank plans to provide Korean companies with better financial services when they engage in large-scale PPP projects or infrastructure projects in Latin America, based on the financial cooperation network the bank established with CABEI and BANDEX.

Direct Loan to Tanzania for Railway Vehicle Procurement

Korea Eximbank announced on March 31 that it will provide $151.6 million from its special account to the “Tanzania Railway Vehicle Supply Project.”

Hyundai Rotem has been awarded a contract to supply trains and electric locomotives for a Standard Gauge Railway line under construction by the Tanzanian government.

This project is the Korean locomotive maker’s first deal made in the sub-Saharan African market.

Through Korea Eximbank’s financing, the company’s export payment related risks would be eliminated.

After Hyundai Rotem and Tanzania Railway Corporation signed the contract in July last year, Korea Eximbank directly negotiated with the Tanzanian government and came up with a timely financial solution.

The Tanzanian government is working on the SGR project, which has a total length of 1,217 km, to operate faster and more stable trains, replacing its conventional narrow-gauge railways.

Fund to Foster Core Strategic Industries and Stabilize Supply Chains

Korea Eximbank announced on February 23 that it will invest 100 billion won to create a fund targeting Korea’s core strategic industries including semiconductors, batteries, bio-health and future cars.

The final fund size is aimed at 500 billion won or more. Korea Eximbank plans to expand its investment destinations to cover both upstream as well as downstream companies in the supply chain of the core strategic industries and proactively manage supply chain risks and diversification, which have recently emerged as key issues for economic security.

Korea Eximbank’s global investment plan for the core strategic industries will be announced on the bank’s website today. The fund is expected to be launched within this year once a fund operator is selected and the Minister of Strategy and Finance gives approval.

Apart from this fund, Korea Eximbank plans to contribute an additional 100 billion won in the first half of this year to support small-and medium-sized companies to enter overseas markets and make ESG investments.

Korea Eximbank will provide a total of 14 trillion won in finance to the innovative growth industries, including 6.5 trillion won to the core strategic industries this year.