The Export-Import Bank of Korea (www.koreaexim.go.kr, Chairman Lee Duk-hoon, “Korea Eximbank”) announced on August 18 that the bank signed a Memorandum of Understanding (MOU) for co-investment with Investment Corporation of Dubai (ICD), the sovereign wealth fund of the Emirate of Dubai.

Korea Eximbank Chairman Lee Duk-hoon met with ICD Chief Executive Mohammed Al Shaibani at the bank's headquarters in Yeouido on August 18, and signed the above MOU.

ICD, established in 2006 as the focal point for managing Dubai's vast investment portfolio, is a USD 70 billion fund owning numerous companies including Emirates Airline, Emirates NBD, Dubai Islamic Bank, and Borse Dubai.

The MOU grew out of a dialogue between the two parties in May this year when the bank, accompanying President Park Geun-hye on her UAE visit, approached ICD to explore ways to utilize Middle Eastern oil money.

For Korea Eximbank, this represents the first MOU it ever signed with a Middle Eastern sovereign wealth fund.

It also represents the bank's first co-investment partnership with a foreign sovereign wealth fund, made possible by an amendment to the Korea Eximbank Act last year allowing the agency to invest in equities, both directly and through equity funds.

The establishment of a platform for economic cooperation between Korea and Dubai signaled by this MOU is expected to help speed up the global expansion of Korean businesses.

Korea Eximbank and ICD are planning to seek joint investment opportunities in the fields of healthcare, Korean cultural products, infrastructure, and energy in the Middle East, Northeast Asia, Central Asia and Africa.

As part of this scheme, the two organizations are initiating a pilot project to help Korean hospitals make inroads into the Dubai market.

Dubai is said to be considering Korean hospitals as the most suitable partners to help upgrade the country's inadequate hospital infrastructure.

The success of this pilot project would likely attract businesses in the Korean cultural sector (such as food and cultural contents) into Dubai as well.

"This MOU grants us easier access to Middle Eastern capital, and therefore will further boost the competitiveness of Korean companies in bidding for overseas contracts," said Chairman Lee Duk-hoon. He added, "Above all, it represents the beginning of a highly rewarding partnership between two entities with very similar investment philosophies and mutually complementary strengths."