Eximbank to Diversify Financial Support

Bank to expand support to SMEs, green growth industries, recycled energy, oil exploration and nuclear power plant exports

President Kim Dong-soo of the Korea Export-Import (Exim) Bank said 2010 is the year for developing the “Korean Hidden Champions” based on a plan the bank prepared to foster those “champion” companies, which means that the bank will focus on SMEs with great potential for growth, but don’t have enough funds to grow.
He said the bank will do all it can to be a leading bank to extend financial support for the export of Korean-type nuclear reactors overseas on the occasion of an order for four nuclear plants for the United Arab Emirates worth $40 billion won by a Korean consortium recently.
The Exim bank head said the bank will not spare its resources to provide financial support to SMEs that have huge growth potential, but don’t have enough funds to spur development. To that end, the bank set aside 1 trillion won for those “hidden champions,” he said.
Kim said the bank will support the development of industries in the areas of green growth, new recycled energy and climate change in order to do its part to expand the number of new growth engines.
The bank will not neglect movies, games and other cultural content industries and will continue to spur their globalization efforts, along with the Korean food industry and Korean entertainment products packaged under the name of Hallyu, or the Korean Wave, so that they can boost Korea’s brand image.
With regard to giving financial assistances to SMEs, he said the bank will take a selective approach to expand the quality of its support, whereas commercial banks are likely to reduce their loans to SMEs this year.
Kim also said the bank will lead the financial support for the export of Korean-type nuclear power plants abroad, as commercial banks won’t be able to do much due to the long repayment periods for their loans. He said the bank will set up a detailed plan to provide financial support to the nuclear power plant industry in the first quarter.
Kim said the bank is ready to provide package-type financial assistance to firms in the area of natural resources exploration, mostly oil, by taking over foreign energy firms through M&As or by buying the rights to oil exploration blocs by allocating 2.2 trillion won to the sector, up 70 percent from last year.
Kim said about 50 percent of the fund will go to the western African region, especially to projects in Angola and Nigeria, and also to Central and South America, including Peru, Mexico and Brazil, to explore natural resources.
In order to secure the needed funds, the bank plans to issue $8.1 billion in bonds overseas at inexpensive interest rates as the global financial market has improved over the last year. The bank will seek to lower the spread to 1 percentage point from the 1.24 percentage points it had to pay last year.
CEO Kim said with Korea now as a member of the Organization for Economic Cooperation and Development (OECD) and the Development Aid Committee (DAC), Korea will increase the Economic Cooperation Development Fund (ECDF) to 1.25 trillion won this year with most of the fund to be funneled to Africa, the region so far neglected by Korea. nw

President Kim Dong-soo of the Korea Export-Import (Exim) Bank