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The Export-Import Bank of Korea (www.koreaexim.go.kr, Chairman Eun Sung-soo, “Korea Eximbank”) announced on May 20 that it will provide a total of USD 1.15 billion, consisting of USD 630 million in lending and USD 520 million in guarantee, for the first LNG import terminal construction project in Kuwait which was awarded to a consortium of three Korean companies.
Also, the Korea Trade Insurance Corporation (“K-sure”) will reportedly provide USD 1.15 billion of export insurance to the project. Among USD 2.6 billion of total borrowings required for the project, USD 2.3 billion will be extended by the two Korean export credit agencies (ECAs). It is the first project jointly financed by the two organizations since the signing of MOU to support Korean firms to win overseas projects and create jobs in January 2018.
The project is considered as a mega-scale project valued at USD 3.6 billion with payment guaranteed by Kuwait Petroleum Corporation (KPC) and executed by its major subsidiary, Kuwait Integrated Petroleum Industries Company (KIPIC). Upon completion of LNG import terminal in 2021, 11 million tons of LNG is expected to be supplied throughout the entire country per annum.
A Korea Eximbank official remarked, “The project was awarded to the Korean consortium composed of Hyundai E&C, Hyundai Engineering and Korea Gas Corporation (KOGAS) with participation by as many as 130 Korean SMEs.” He added, “The project is anticipated to promote overseas expansion of domestic SME manufacturers as the project will support high utilization of Korean equipment.”
Korea Eximbank had previously financed USD 1.1 billion in 2013 for an oil refinery project in Vietnam which was invested by KPC. Korea Eximbank provided USD 2.15 billion to KPC including this investment, since the signing of MOU with KPC for financial cooperation worth USD 5 billion in October 2015.