The Export-Import Bank of Korea (www.koreaexim.go.kr, Chairman Yong Hwan Kim, “Korea Eximbank”) announced that it held a ‘Briefing on EDCF Assistance Strategy for 2013’ at Korea Federation of Banks headquarters in Seoul on February 27.

Over 200 delegates from companies eyeing infrastructure projects in developing countries took part in the briefing hosted by Korea Eximbank to provide information on EDCF*’s plans in 2013 to support infrastructure projects abroad and to introduce its new guarantee program.

* Economic Development Cooperation Fund (EDCF): a government-run ODA program established in 1987 to promote the industrialization and economic stability of developing countries through the provision of long-term, low-interest credit.

Participants at the briefing session learned that the volume of new EDCF loan commitments planned in 2013 has risen 7.4% from KRW 1.2567 trillion in 2012 to KRW 1.35 trillion.

Korea Eximbank plans to use the increased commitment volume to finance more green projects that would drive the sustainable growth of developing countries. At the same time, it will actively seek to develop projects in sectors that favor the participation of SMEs, such as health and medicine.

Korea Eximbank also introduced a new guarantee program to diversify the means of EDCF assistance and to better support large-scale infrastructure projects in developing countries.

Developing countries have lately been eager to pursue infrastructure projects through PPP* deals, but are often having trouble obtaining financing due to their low sovereign credit ratings.

Korea Eximbank’s plan is to plug such gaps by providing a guarantee to financial institutions that finance such projects, thereby promoting private sector investment in infrastructure projects of developing countries.

* Public-Private Partnership (PPP): A contractual arrangement whereby private investors finance part or all of a project to build a public facility such as a power plant, railway, port, or road and, in return, obtain from the host government the right to operate the facility at a profit, within certain limits.

Multilateral Development Banks such as the World Bank and ADB also support large-scale infrastructure projects in developing countries through similar guarantees that serve to reduce the investment risk of private investors.

Executive Director Seong Hyeog Yim of the EDCF Operations Group at Korea Eximbank remarked, “Together with our hybrid financing solution that would combine EDCF support with export loans, this guarantee program will give an added boost to the entry of Korean firms in the infrastructure markets of developing countries, at the same time as easing the fiscal burdens of governments.”

The briefing session also featured a detailed presentation on how to participate in EDCF-supported projects which participants found very helpful.