The Export-Import Bank of Korea (KEXIM) signed a $6 billion framework deal with Saudi Aramco on March 7 to offer $6 billion in financing over the next three years, KEXIM said.
The deal is designed to help South Korean companies win contracts in the Middle Eastern country.
The framework agreement sets the support terms, such as a financing support cap and support procedures targeting overseas blue-chip procurement companies, which could lead to swift financing for Korean companies wanting to win individual contracts, such as winning overseas projects and joint venture investments.
KEXIM Chairman Yoon Hee-Sung and Saudi Aramco Chief Financial Officer Ziad Al-Murshed inked a framework agreement at KEXIM headquarters in Yeouido, Seoul.
The deal will enable KEXIM to help Korean companies’ competitiveness in their pursuit of new orders in the Middle East, and ramp the safety of supply necessity resources, such as crude oil.
The deal is a follow-up step to support the so-called "2nd Middle East Boom," known as potential business opportunities.
The “1st Middle East Boom” refers to hard-earned cash Koreans earned by working at construction sites in the Middle East during the 1970s.
The latest deal came after Saudi Crown Prince Mohammed bin Salman made a visit to Korea last November visit to Seoul and President Yoon Suk-yeol made a state visit to the United Arab Emirates this past January.
Aramco is expected to expand investments in the petroleum and gas sectors on the back of rising crude oil prices and ramp future new project orders to nurture next-generation energy industries to achieve carbon neutrality.
Both sides’ agreeing to the $6 billion is expected to help Korean companies win orders from the Middle East region through prior financing, which could lead to winning orders later.
Korea gets 30 percent of its total crude oil imports from Saudi Arabia, and the nation ranks 1st among crude oil importers across the globe. Aramco is responsible for exclusive development of crude oil and gas projects in Saudi Arabia.
KEXIM Chairman Yoon said at the deal signing event, “KEXIM will play a part of pump-priming for Korean companies’ winning of project orders in the Middle East region by establishing a prior financing cooperation regime targeting Aramco, the largest procurement company in the region.”
Now that $1 billion is set aside for the hydrogen and renewable energy deals, Chairman Yoon said, it is expected to help Korean companies secure an upper hand in the new markets.
In January 2022, KEXIM had already reached a $5 billion framework agreement with the Abu Dhabi national oil company ADNOC.
As a result, KEXIM’s striking framework agreements with ADNOC and Aramco in succession has established a financial supply network involving large amounts of money.
Meanwhile, KEXIM plans to offer full support to the Korean government’s policy goals of landing orders worth $50 billion by 2025 annually and becoming a global top four overseas construction order winner power.
KEXIM Hit the Gas to Dualize Data Center through PMO
The Export-Import Bank of Korea (KEXIM) is accelerating efforts to dualize its data center.
The state-run policy lender plans to raise its data capabilities by upgrading software, introducing new hardware, and building cloud foundation beyond the simple IT infrastructure.
KEXIM said on March 10 the lender offered a tender for a project management office (PMO) to relocate its data center. The project cost 2.3 billion.
The period of the project is seven months between May and November. PMO is responsible for offering quality and risk management capabilities in conjunction with the relocation of its data center.
KEXIM is building its data center at an idle plot of KEXIM Manpower Development Institute in Yongin, Gyeonggi-do, whose dedication is scheduled for July 2024.
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