On March 19 in Montevideo, Uruguay, the Export-Import Bank of Korea concluded a USD 1 billion trade financing guarantee contract with the Inter-American Development Bank*.

* The Inter-American Development Bank (IDB), founded in 1959, is the world’s largest regional development bank with callable capital of USD 101 billion. IDB has 28 regional members including the US, Canada, and countries of South America, and 18 non-regional members including Japan, France, Germany, and the UK. South Korea joined the IDB on March 2005.

Chairman Yong Hwan Kim of the Export-Import Bank of Korea signed the guarantee contract with Luis Alberto Moreno, president of IDB, while attending IDB’s 53rd Annual Meeting.

As a result of this contract, the Bank will be able to provide Interbank Export Credit for Korean exports to 77 banks in 20 Central and South American countries that IDB provides guarantees for, as well as provide L/C confirmations issued by these banks.

The Interbank Export Credit is financing provided by the Bank to local banks so that importers in Central and South America can obtain loans to buy Korean goods.

L/C confirmation provides guarantees for letters of confirmation issued by banks located overseas, thereby guaranteeing payment for export.

These efforts are anticipated to promote Korean exports to Central and South America by alleviating credibility concerns about local L/Cs.


A Korean SME telecommunications equipment manufacturer became the first Korean firm to sign a USD 1 million export contract for telecommunications equipment with the Ecuador Telecommunications Authority. Despite the good news, the firm was concerned about the creditability of the L/C it obtained from Banco Bolivariano for its export payment receivables, as it was unfamiliar with the bank. The firm was worried that there would be no Korean bank to confirm the L/C issued by the Ecuadorian bank.
However, such worries were mitigated when the Export-Import Bank of Korea, together with IDB, agreed to guarantee the L/C issued by the Ecuadorian bank. In case the local bank is unable to make payments for the exported goods, the exporting company can receive payment from the Export-Import Bank of Korea.

The annual trade volume to Central and South America totaled USD 40.1 billion in 2011, making it an important export region.

The contract with IDB is expected to significantly increase exports based on L/Cs to Central and South American regions from the 13.6%* in 2009.
* Source: Korea International Trade Association, 2009

At the same time, the Bank and IDB agreed to extend the termination of a USD 2 billion MOU for co-financing infrastructure projects.

This MOU was initially signed in 2009 to facilitate joint financing of projects participated by Korean firms as exporters and investors.

As the MOU was set to terminate on the March 30th, both parties agreed to extend the MOU by two years.

Close cooperation between the Bank and IDB to identify and support joint financing projects is expected to yield tangible results in the near future.

(continued on part 2 of 2)