The Export-Import Bank of Korea (Korea Eximbank) signed a Reciprocal Risk Participation Agreement (RRPA)* with Australia’s official ECA, Export Finance and Insurance Corporation (EFIC) to provide joint support for Korean and Australian exports to a third country.

* Agreement to provide joint financing to share the risk taken up by each institution

The agreement signed at the headquarters of Korea Eximbank by Chairman Yong Hwan Kim and EFIC CEO Mr. Angus Armour mainly states that the two institutions will provide joint financing support for 1) joint exports of Korean and Australian firms to a third country 2) exports by Australian firms to Korean firm located in a third country (with more than 10% Korean shareholding) or 3) exports by a Korean firm in Australia (with more than 10% Korean shareholding), providing uniform support but splitting the risk load.

Recently, increase in the scale of projects and demand for development in the Asian region increased the number of jointly-participated projects in the Asian Pacific region by Korean, Chinese, Japanese and Australian firms.

According to the Asian Development Bank (ADB), demand for infrastructure development in the Asian region is forecasted to reach USD 8 trillion over the next ten years.

Amidst such views, it is anticipated that the agreement for joint financing support will increase opportunities for Korean firms, which has the industry technological expertise, and Australian firms, which has ready access to natural resources, in participating in large-scale overseas projects.

Chairman Kim commented after signing the agreement,“We will strengthen business cooperation with EFIC to jointly search for new projects in natural resources and more efficient financing support for projects participated by agents of both countries.

Meanwhile, the Korea Eximbank plans to actively support large-scale overseas project pursued by Korean firms by effectively utilizing MOUs with ADB, IDB, IFC, and major ECAs, as well as with JBIC, which is in progress this year.