□ Korea Eximbank (www.koreaexim.go.kr, Chairman Yong Hwan Kim) announced that the Bank has greatly reduced financing costs for Korean companies by negotiating for simplification of the current 2-step guarantee structure and reductions in guarantee rates with Saudi Arabia and Kuwait, major overseas plant clients in the Middle East.

※ Overseas construction orders from Saudi Arabia and Kuwait accounted for 21.6% of total contract amounts secured by Korean companies in 2010. (International Contractors Association of Korea)

□ In the past, Korean companies had to burden both the financial costs of counter guarantees by Korean banks as security and guarantees by local banks in the Middle East because companies in the Middle East did not accept guarantees issued by Korean banks in order to protect their domestic financial industry.

○ For instance, when Waist Gas Plant Construction of Saudi Arabia requested a performance-bond issued by local banks in January, SK Engineering & Construction had no choice but to comply with the request.

○ Korea Eximbank, with much know-how and experience in supporting overseas plant projects, succeeded in persuading company representatives from the Middle East to replace the dual guarantee system to the single guarantee system of Korea Eximbank.

○ An official from the SK Engineering & Construction Group said,“Thanks to Korea Eximbank, the SK Engineering & Construction Group no longer needs to pay guarantee fees to local banks and is able to minimize project financing costs.”

□ An official from Korea Eximbank stated, “The Bank will actively seek and promote single guarantee-based trade and take initiatives to reduce financing costs for Korean companies.”

□ The Bank also consulted with Kuwait’s largest state-run commercial bank to cut its guarantee rates, from the current 2% to less than 1%. In Kuwait, only the counter guarantee system is accepted.

○ As a result of the efforts of the Bank, if a Korean company wins a USD 1 billion construction contract from Kuwait and receives a 3-year performance guarantee, it will be able to reduce financing costs by approximately KRW 10.7 billion.