□ On August 25, Korea Eximbank (www.koreaexim.go.kr, Chairman Yong Hwan Kim) concluded an MOU with KPI, LG Chem, and Korea Trade Insurance Corporation to provide financing for the construction of a petrochemical plant and its operations in Astana, Kazakhstan.

○ Representing Korea, Chairman Kim signed the agreement with UCC President Dauren Yerdebay, at the presidential palace in Astana.

○ The signing ceremony was attended by President of Korea Myung-bak Lee, President of Kazakhstan Nursultan Nazarbayev, as well as LG Chairman Bon-moo Koo.
* KPI (Kazakhstan Petrochemical Industries): A subsidiary company established by UCC (United Chemical Company), a public chemical company of Kazakhstan.

□ Under the MOU, Korea Eximbank and K-sure will arrange and provide financing for the project while LG Chem and KPI will construct and operate petrochemical production facilities. LG Chem and KPI will jointly invest USD 4 billion for the 3.85 million m2 project area located in a special economic zone in Atyrau, Kazakhstan. The facility when completed will be capable of producing 840,000 tons of ethylene and 800,000 tons of polyester per annum.

□ Availability of medium- to long-term financing was the key factor in partner selection for Kazakhstan as the country considered large-scale financing capacity a prerequisite for successful implementation.

○ By actively expressing financial support for the project from the very early stages of the project in 2008, Korea Eximbank contributed greatly to the successful participation of Korean companies in the project.

** The amount of support will be determined at a later stage depending on the total value of orders received by Korean companies related to the project.

□ This project for construction and operation of the polyethylene facility in Atyrau is the largest project in the Kazakhstan petrochemical plant sector. The project is an investment development project with LG Chem playing a key role in share acquisition (50%), management, operation, sales, etc.

○ LG Chem will produce polyethylene from low-cost ethane gas, a raw material in abundance in Kazakhstan, rather than from naphtha, a derivative of refined crude oil. By doing so, the company hopes to secure substantial cost competitiveness and profitability.

□ According to Korea Eximbank, “The project will be the first in Kazakhstan’s petrochemical industry participated by Korean companies as project owners and will establish a bridgehead into the natural resource-rich country. Korea Eximbank will continue to expand financing and arrangements for investment development projects.”