Poland as Bridgehead

Korea Exim Bank signs MOU on cooperation with Polish foreign investment agency to help Korean firms

The Korea Export-Import (Exim) Bank recently signed a cooperation agreement with the Polish Information and Foreign Investment Agency to provide financial support to Korean firms doing business in Poland. Chairman and President Kim Dong-soo signed for the Korean side and his Polish counterpart President Stanislaw Majman signed for the Polish side, the Exim Bank said.
The Polish foreign investment agency is in charge of expanding foreign investment in Poland and provides administrative support to foreign firms operating in the Eastern European country.
The agreement spells out the two entities’ cooperation in such areas as investment, economic cooperation, joint production, the exchange of information on investment, intermediary roles for investors and meetings between related companies, joint ventures, industrial cooperation and joint marketing, among others, to speed up investment and cooperation in general.
Chairman Kim, at the Korea-Poland Economic Forum held following the signing of the agreement, said that Poland will be a key country for Korean firms’ advancement into Europe after the Korea-EU free trade agreement becomes official. The Exim Bank will provide support to Korean firms moving into Poland through this agreement, which facilitates cooperation between the two signatories in many economic and business areas.
In the meantime, the Exim Bank also signed an agreement with Senior Vice President of Bank Gospodarstwa Krajowego (BGK) involving joint financial support and the exchange of information between the two institutions.
Bilateral trade between Korea and Poland has been growing year after year, rising to $4.4 billion last year, up from $3.81 billion in 2007 and $2.88 billion in 2006.
Korea Exim Bank will provide $225 million in loans and guarantees in project financing to back up Korean builders undertaking the Al Qatrana Power Plant project in Jordan, the bank announced on Aug. 20. The financial package includes $125 million in loans and $100 million in credit guarantees. The power plant project, to be built with private financing, is part of Jordan’s effort to increase power generation capacity to cover the current power shortage. The projected thermal power plant is to be built on a site located 90 km from Amman, the capital of the Arab country.
Korea Electric Power Corp. and its affiliate Korea Southern Power Co. will be the main sponsor and operator of the projected power plant with Lotte Engineering and Construction Co. involved as the exporter of the power plant facilities.
Exim Bank has not only provided $225 million in loans and guarantees, which makes up 64 percent of the total cost of the project, but it has also helped arrange the remaining financing of the project by leading an international financial package, decisive to the success of the project.
Participants in the financial package include Exim Bank, Islam Development Bank and Proparco, a French development bank under the French Development Authority.
Exim Bank officials said they opened the way for Korean builders to expand their inroads into the power plant construction projects in the Middle East, the largest power plant project market in the world. The Al Qatrana project will create opportunities for exports of power generation facilities and foreign exchange financing for high foreign exchange earnings, they said.
Korea Exim Bank announced on June 22 that Chairman Kim and POSCO CEO Chung Joon-yang signed a Memorandum of Understanding to form a strategic alliance for the successful implementation of POSCO’s overseas steel manufacturing and natural resources development projects.
In line with the MOU, Korea Exim Bank and POSCO will collaborate to explore promising overseas business opportunities, provide financial support and equity participation in core business activities and organize joint project facilitation teams when necessary.
According to Korea Exim Bank’s Kim, “The MOU will contribute to enhanced global competitiveness of both institutions as well as establish a new Company-Bank Cooperation Model for overseas resources development combining POSCO’s overseas business execution capacities and Korea Exim Bank’s customized financial support expertise.”
As the core supporting bank for overseas resources development, Korea Exim Bank has allocated 2 trillion won to actively support Korean companies’ overseas participation in resource development projects. nw

Chairman and President Kim Dong-soo of Korea Export and Import Bank.