The Export-Import Bank of Korea (www.koreaexim.go.kr, Chairman Kim Yong-hwan, “Korea Eximbank”) announced on November 16 that it signed a ‘Framework Cooperation Agreement’ with Mexico’s state oil producer Petroleos Mexicanos (PEMEX).

The Agreement commits the two agencies into a long-term relationship of cooperation in which Korea Eximbank would provide up to USD 2 billion for the next three years to help finance PEXEX projects where Korean companies participate.

Korea Eximbank Chairman Kim Yong-hwan and PEMEX CEO Emilio Lozoya met at Korea Eximbank’s Yeouido headquarters and signed the agreement.

Chairman Kim remarked at the signing ceremony, “As part of measures to promote economic cooperation between Mexico and Korea, we will do our utmost to create more opportunities for Korean companies to participate in large-scale infrastructure projects in Mexico.” He also urged his counterpart to “modify PEMEX’s policy so as to allow more room for Korean companies to participate in its projects.”

In reply, Mr. Lozoya said, “It is important that we bring in globally competitive companies such as those from Korea in order to ensure the successful execution of Mexico’s infrastructure development plan. And since Korea Eximbank has expressed its willingness to provide such generous financing at a time when we needed to attract a significant amount of foreign capital, we will redouble our policy reform effort toward enabling more Korean companies to participate in our projects.”

Previously, companies from countries without FTAs with Mexico were restricted from entering bids for Mexican government-sponsored infrastructure projects as independent contractors.

However, that restriction was lifted after Korean President Park Geun-hye asked Mexican President Peña Nieto at the APEC summit meeting held on October 8 to facilitate the entry of Korean companies to Mexico, referring to the pending agreement between Korea Eximbank and PEMEX.

Under the newly signed agreement, Korea Eximbank will provide financing of up to USD 2 billion over the next three years to support PEMEX projects in which Korean companies participate, upon request from PEMEX.

Mexico’s new government under President Peña Nieto is ambitiously seeking to upgrade and expand the nation’s infrastructure base, and has recently announced a USD 310 billion plan to invest in refinery, high-speed railway, and power plant projects.

In particular, PEMEX plans to launch a number of projects to expand oil rigs in the Gulf of Mexico and modernize oil refineries as part of Mexico’s energy sector reform plan, which would present big opportunities to Korean companies in the relevant sectors.

A Korea Eximbank official noted, “This agreement which we signed with the largest company in the second-largest Latin American country will enable us to provide full-spectrum support to Korean companies participating in new projects in Latin America.”