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Korea Exim News

Korea Eximbank to provide direct loan to Government of Tanzania for railway vehicle procurement

Date 2022.03.31 View 3876

□ The Export-Import Bank of Korea (www.koreaexim.go.kr, Chairman Bang Moon-kyu, “Korea Eximbank") announced on March 31 that it will provide a total of $151.6 million from its special account* to the "Tanzania Railway Vehicle Supply Project."

 

* Special Account: A financial facility introduced in 2019 to support low-income countries ’(B+ or less) placement of orders with Korean companies, which is usually difficult to be supported through tranditional export financing solutions due to their high national risks
 

 

□ Hyundai Rotem has been awarded a contract to supply trains and electric locomotives for a Standard Gauge Railway (SGR) line under construction by the Tanzanian government.
 

  This project is the Korean locomotive maker’s first deal made in the sub-Saharan African market.
 

  Through Korea Eximbank’s financing, the company‘s export payment related risks would be eliminated.  
 

  Since Hyundai Rotem and Tanzania Railway Corporation  signed the contract in July last year, Korea Eximbank has directly negotiated with the Tanzanian government and came up with a timely financial solution.
 

 

□ The Tanzanian government is working on the SGR project (a total length of 1,217 kilometers) to operate faster and more stable trains, replacing its conventional narrow-gauge railways.
 

  As a top priority project in Tanzania's national development plan, these new trains will run much faster, significantly reducing the transport time between Dar es Salsam and Mwanza from the current 38 hours to 12 hours.
 

  Hyundai Rotem’s electric vehicles will be Tanzania’s first eco-friendly trains and locomotives to run in the country.
 

 

□ A Korea Eximbank official said, "This is our first case of extending Export Finance to Tanzania. We have diversified away from the long standing EDCF-oriented cooperative relationship with the country and laid the foundation to support large-scale infrastructure projects in more diverse ways."