The Export-Import Bank of Korea (www.koreaexim.go.kr, Chairman Lee Duk-Hoon, "Korea Eximbank") announced on April 8 that the bank successfully sets up a KRW 132.5 billion 'Global Energy & Infrastructure Fund' (EI Fund).

In 2014, Korea Eximbank helped to raise investment funds amounting to a combined sum of KRW 770 billon by contributing a total of KRW 92.5 billion as an anchor investor to five private equity funds (PEFs) targeting three specific sectors: global energy & infrastructure, export-oriented SMEs and medium-large firms, and medical services.

Korea Eximbank invested KRW 30 billion (23% of total commitment) in the KRW 132.5 billion EI Fund.

The remaining 102.5 billion won was invested jointly by private financial institutions such as Shin-han Bank and Korea Investment & Securities Corporation, and mutual aid associations such as Korea Scientists & Engineers Mutual-aid Association and The Military Mutual Aid Association, each contributing around KRW 20 to 30 billion.

The capital contributions Korea Eximbank made in its capacity as anchor investor served to maximize the leverage effect of the limited public financial resources at its disposal in supporting the overseas expansion of Korean companies; at the same time, they also induced the participation of domestic private capital in global investment projects.

Korean institutional investors have been traditionally reluctant to invest in energy or infrastructure-related funds.

EQ Partners, a private equity firm specializing in the energy and infrastructure sector (with KRW 1 trillion out of its KRW 1.5 trillion under management invested in overseas energy and infrastructure-related assets), has been selected as the manager of the fund.

The EI Fund is going to invest mainly in overseas energy and infrastructure projects where domestic companies participate as sponsors, off-takers, EPC contractors, operators, or equipment suppliers.

A Korea Eximbank official remarked, "The EI Fund will likely give Korean firms an extra edge in winning overseas plant construction deals by satisfying the demand of sponsors for comprehensive financing package offers including equity financing as early on as the bidding phase."

Korea Eximbank thus successfully established three* of the five funds it has put together since last year.

In particular, the two other funds established to aid the entry of SMEs and medium-large firms in global markets, have raised KRW 530 billion, exceeding the original target of KRW 470 billion, thanks to the active participation of private investors.