The Export-Import Bank of Korea (www.koreaexim.go.kr, Chairman Yong Hwan Kim, “ Korea Eximbank”) and Korea Development Bank (KDB) will provide USD 50 million** in Reserve Based Financing (RBF)* for the acquisition of an oil/gas field in Texas, US.

* Financing technique in which financing is provided based on future expected cash flow from oil/gas field project
** Korea Eximbank and KDB will each provide USD 25 million

The project involves Troika Fund's* acquisition of Apache Corporation's natural gas field.

* Troika Fund is the first overseas natural resources fund established by the Ministry of Knowledge and Economy in December 2009 to support natural resources development overseas, whose investors include public and private-sector natural resources companies and government-run banks.

RBF is a sophisticated financing technique that requires much experience and expertise, involving the analysis of reserves, price prediction and estimation of the operating cost of the oil/gas field.

The project is significant as the first RBF loan to be provided successfully through cooperation among government-run banks, boosting the amount of oil and gas developed by Korean firms.

To help Korean firms obtain project orders, Korea Eximbank, KDB, Korea Insurance Corporation, and Korea Finance Corporation had formed a consultative group of government-run banks in February to facilitate cooperation and information exchange, agreeing on “Common Guidelines for the Operations of Government-run Banks.”

The first RBF loan in Korea came as a result of combining in this way Korea Eximbank’s expertise in natural resources development with KDB’s project identification capability.

A representative of the Korea Eximbank observed, “This is the first case of cooperation between government-run banks to provide an RBF loan, traditionally a preserve of foreign private-sector financial institutions. We will continue to seek ways to diversify our channels for supporting Korean firms by cooperating with other government-run banks.”