|SUBJECT||Utilizing Funding Power of China and Japan|
The Export-Import Bank of Korea (Korea Eximbank) formed a regular consultative group with five top-tier Chinese Banks* including Industrial and Commercial Bank of China (ICBC) to support overseas project contracts of Korean companies.
* ICBC, China Construction Bank (CCB), Agricultural Bank of China (ABC), China Bank of Communications (BoCom), and Bank of China (BOC).
Amid decreasing funding for large-scale projects from European banks due to the Eurozone debt crisis, Korea Eximbank laid a foundation for utilization of the high foreign currency liquidity of China’s banks.
More than 80% of recent projects have been large projects of over USD 500 million; thus, funding capacity is an important determinant in contract awards.
The first regular consultative group meeting was held at Korea Eximbank Headquarters in Yeoido. Participants discussed joint participation with Chinese banks in large projects supported by Korea Eximbank in sectors such as shipbuilding, plants, and M&As. Participants also discussed plans to hold quarterly meetings for new project identification and development.
In order to further strengthen cooperative partnerships, Korea Eximbank concluded MOUs with ABC, BoCom, and CCB during the meeting. The Bank had already concluded MOUs with ICBC and BOC.
In addition to these meetings, Korea Eximbank plans to form a regular consultative group with Japanese banks on February 20, strengthening mutual cooperation over the course of a project, from project identification to financial underwriting.
Korea Eximbank had cooperative relationships with individual Japanese banks in the past, but it is now seeking to form a consultative group in line with current trends to provide more efficient financial support.
Korean and Japanese companies have recently increased participation in large power and oil refining projects in Saudi Arabia and the United Arab Emirates through consortiums.
A Korea Eximbank representative stated, “We will fully utilize our global network to provide the support needed by our companies to secure contract awards. During this consultative group, we will negotiate co-financing with Chinese banks for Korean exports of large shipbuilding orders for the first time.”
Korea Eximbank has been networking with international organizations and global investment banks to strengthen its capacity to provide financial arrangements for large overseas projects.
Since establishing its Investment Banking Office in July 2011, Korea Eximbank signed MOUs with 21 international financial institutions for financial cooperation and formed consultative groups with Korean commercial banks, securities firms, and life insurance agencies on February 9.
To further develop the Bank’s networks, Korea Eximbank plans to host the Middle Eastern and Northern African Countries (MENA) Conference 2012, inviting major sponsors and financial institutions of the Middle Eastern region, where more than 50% of overseas plant exports were ordered.