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Press Release

Korea Eximbank Provides USD 500 million for Gas Project in Mozambique

Date 2020.12.10 View 16622

The Export-Import Bank of Korea (www. koreaexim.go.kr, Chairman Bang Moon-kyu, “Korea Eximbank”) announced on December 10 that it would provide USD 500 million in project financing for the Mozambique Offshore Area 1 Project.

 

Daewoo E&C and a goup of SMEs participate in the project as they received the plant order worth USD 550 million.

The project financing fund will be spent as the companies’ construction costs and it is expected to create 1,300 new jobs annually and promote foreign exchange earnings.

 

The project is sponsored by eight companies including Total and a state-run petroleum company of Mozambique to build and run two LNG plants by developing gas fields and the produced natural gas will be sold on long-term contracts.

 

The total project cost is USD 23.5 billion and the annual LNG production volume is estimated at 12.9 million tons.

 

A group of eight export credit agencies have joined the project across the globe, including Korea Eximbank, the Export-Import Bank of the United States, the Japan Bank for International Cooperation and SACE from Italy.

 

Considering two Korean shipbuilders ― Hyundai Heavy Industries and Samsung Heavy Industries ― are now in negotiations for orders to build 17 LNG ships worth USD 3 billion, it is expected the project finaning will help Korean shipbuilders win the LNG ship orders.

 

Korea Eximbank’s participation in the project is meaningful in that it laid the foundation for Korean SMEs and medium-large companies to enter the African market with huge growth potential where a number of countries are resource-rich.

 

Korea Eximbank has been making continuous efforts to support Korean firms to enter the African natural resources development market. Back in 2017, the bank offered project financing for the 4 gas field development project in Mozambique where Samsung Heavy Industries and Korea Gas Corporation participated. Last year, it provided financial support for Daewoo E&C to receive order for the NLNG natural gas liquefaction plant construction project.

 

"Despite the lingering challenges, such as the spread of COVID-19, the global economic downturn and reduced orders, we expect our financial assistance to raise Korean companies' global competitiveness in emerging markets to secure orders," a Korea Eximbank official said.