AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYNo
The Korean Eximbank's financial support for the Iraqi the Bismayah New City Project has a total volume of USD 1.16 billion. More specifically this guarantee is comprised of USD 775 million advance payment bond which is a "guarantee covering the liability of the construction firm to repay advance payments received for initiating construction" as well as a USD 388 million performance bond which is a "guarantee covering the liability of the construction firm to repay advance payments received for initiating construction". The Korean company Hanwha Engineering & Construction will construct the new city accommodating in Bismayah, Iraq.
In this context, the Bank stated: "We expressed our willingness to provide financing early on in the project as we recognized its importance to obtaining project orders and successful execution of Korean firms in Middle Eastern countries such as Iraq. We will continue to support Korean firms’ expansion overseas by providing financing, in this case, designed to reduce political risk, so that companies can secure large-scale overseas projects."
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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