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Korea Exim News

Korea Eximbank Strengthens Position as the Leading Institution for Green Export Finance (Part 1)

Date 2011.05.02 View 27864
□ Korea Eximbank (www.koreaexim.go.kr, Chairman Yong Hwan Kim) announced that the Bank will provide KRW 40 trillion in support to green industries by 2015 and nurture 50 global green champions, exporters in the green sector with exports exceeding USD 300 million.

○ The Bank announced “Plans to Lead Export Industrialization of the Green Industry,” during a press briefing on April 20.

○ With such plans, Korea Eximbank hopes to strengthen its status as an institution specializing in green export finance.

□ Utilizing over 30 years of experience in supporting the shipbuilding industry to become a world leader, the Bank will nurture the green industry to dominate the world market much like Korea’s shipbuilding industry.

○ In the past, the Bank first assisted efforts to build a domestic industrial foundation then provided support for exports.This time, the Bank, will simultaneously support development of a domestic industrial foundation and export activities to drive export industrialization of the green industry

< Green Industry Support Strategies>
? Promote the green industry to enter overseas markets and simultaneously develop a domestic industrial foundation.
? Develop strategies for creating overseas markets for green plants.
? Develop strategies for fostering green exporters.

□ As Korean green companies are late entries into the global green market, they suffer from the lack of overseas track records and inability to win contracts due to assistance measures for green industries, known as the green race, of competing countries.

□ The Bank is actively implementing strategies to identify and support pilot projects utilizing market-leading financial products including direct investment, composite finance, and exclusive PF to secure overseas market-entry opportunities for Korean green companies.

○ Direct Investment: the Bank makes direct investment in equities to induce private investment and thus improve reliability and viability of new and renewable energy plant projects.
Ex) Investment in large-scale solar/wind power plant projects in Canada

○ Composite Finance: the Bank provides loans linked with low-interest EDCF funding to increase project feasibility of green plant projects with low commercial value in developing countries.
Ex) The Laos hydropower project participated by Korean companies and the Laos government as project owners would be supported through EDCF funding and Bank loans. The support would cover a portion of project identification costs, equity investment, and project implementation costs.

○ Exclusive PF: the Bank exclusively provides support for new and renewable energy development projects, such as wind and small hydro-power projects, which are small in scale, at less than USD 200~250 million in total project cost, and with relatively long project investment terms and thus face difficulties in organizing lenders.
Ex) Exclusive support for Indonesia’s hydro-power development project (total project cost: USD 200 million)

□ Also, in order to expand the foundation of domestic green industry and help create jobs, the Bank plans to foster leading SME exporters in the green industry through the utilization of comprehensive financing and implementation of the Bank’s Korean Hidden Champion Initiative.