The Export-Import Bank of Korea (www.koreaexim.go.kr, Chairman Lee Duk-Hoon, "Korea Eximbank") announced on April 13 that the Bank signed a Memorandum of Understanding (MOU) for financial cooperation with The State Bank for Foreign Economic Affairs of Turkmenistan ('TVEB'), a state-owned bank responsible for Turkmenistan's external financial transactions.

Korea Eximbank Chairman Lee Duk-Hoon met with Korea Trade Insurance Corporation Chairman Kim Yeoung-Hak and TVEB Chairman Rahimberdy Jepbarov at the Korean Presidential Blue House and signed the MOU, in which the three organizations agreed to consider financial support to Turkmenistan's projects awarded to Korean companies and to exchange information regarding future projects in Turkmenistan.

The MOU was signed in the presence of President Park Geun-Hye and President Gurbanguly Berdymukhammedov of Turkmenistan.

The strategic network of financial cooperation established among the three principal public financial institutions of the two countries is likely to give added boost to the entry of Korean firms in Turkmenistan's project market.

Turkmenistan is home to the world's fourth-largest natural gas reserves, with gas exports accounting for the bulk of its government revenue.

The country has 9.3% of the world's proven gas reserves, but only produces 1.9% of global output, leaving substantial room for further development.

Its government is pursuing a national economic development program to develop value-added industries using natural gas inputs, such as petrochemical products.

With project opportunities in Turkmenistan's petrochemical and gas development sectors expected to multiply in the future, competition is likely to heat up among Korean, Chinese, and Japanese contractors who are actively looking to expand into new territories.

The MOU signed among Korea Eximbank, Korea Trade Insurance Corporation, and TVEB is intended to give Korean firms a head start in that competition.

The trend toward 'financing first, award later' arrangements in overseas construction bids are another factor motivating the MOU.

A Korea Eximbank official remarked, "Although the recent drop in oil prices is curtailing new oil and gas projects, it is necessary to adopt a strategic approach to Turkmenistan as it continues to generate a steady stream of oil and gas projects. This MOU has been signed with that kind of long-term perspective in mind."