AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYNo
The Korean Eximbank's financial support for the Barzan Gas Project has a total value of USD 1 billion. The Korean company Hyundai Heavy Industries will participate in the project by overseeing the establishment of the offshore plant, which includes the construction of the mining facilities in North Field as well as the design and installation of the underwater pipelines. Additionally, five Korean SMEs will oversee the construction of the fossil fuel production plant on land in collaboration with the Japanese company JGC Corporation, see also related intervention.
Alongside the allocation of USD 1 billion, the Korea Eximbank additionally requested the Japanese company JGC Corporation, who oversees the plant construction on land, to increase its contract volume for supplies of plant equipment from Korea. Before the agreement JGC sourced inputs worth USD 100 million from three Korean SMEs. According to the agreement, JGC increases this amount to USD 190 million for supplies of plant equipment from five Korean SMEs.
The Japanese company JGC Corporation won a contract for this project with financial support from the Japan Bank for International Cooperation, see related measure. Presumably, the goods the Japanese company was contracted for are similar to those ordered by the Korean SMEs.
In this context, the Korea Eximbank stated: "Most notably, Korea Eximbank’s decision to provide financing amounts in proportion to the scale of Korean equipment and materials used in plant projects from their bidding stages, contributed to increasing Korean exports and the number of contracts won by Korean companies." It added: "The Bank’s strengthened comprehensive support networks with Korean companies for large-scale projects also contributed to the conclusion of this contract."
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets and from foreign subsidiaries.
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