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On 30 November 2015, the Export-Import Bank (Eximbank) of Korea announced approving a GBP 100 million (approx. USD 144 million) loan in project financing for the UK based Mesey Gateway Bridge Building Project.
This project involves the construction of a 2.13 km long cable-stayed bridge. The Korean company Samsung C&T in a consortium with British Kier group and Spanish the FCC was awarded the project tender in April, 2014. Samsung C&T holds a 33.3% share. The Eximbank of Korea approved this project financing loan following the involvement of the Korean company.
In this context the Bank stated: 'The funding provided to this project is Korea Eximbank's support for the Korean company's entry into the advanced British infrastructure PPP market for the first time.' and further added: 'Once this project is successfully completed, it is expected that more Korean construction companies will be able to participate in other projects in the UK, taking advantage of Korea Eximbank's firm financial support and their cutting edge technologies.'
The Eximbank of Korea provides various financial instruments on favourable terms to support specific Korean companies' business activities abroad. The terms and conditions vary depending on the loan or guarantees' purpose. More information on such loans and guarantees can be found on the Bank's website under Official Export Credit as well as under export related loans / guarantees.
Project financing loans include preferential terms such as repayments being mainly made from the project's cash flow generation and secured on the basis of the project's assets alone. As such the loan agreement is tied to the project's finances and not the company in question. In this context the Eximbank of Korea has previously noted: 'sponsors are thus shielded from the risk of project failure'.
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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