ANNOUNCEMENT 25 Jul 2011
On 1 June 2011, the Export-Import Bank of Korea (Korea Eximbank) announced providing funds for a coal-fired power plant project in Viet Nam.
NUMBER OF INTERVENTIONS
The Export-Import Bank of Korea, press release of 25 July 2011, Bank Commits USD 620 Million in PF for the Largest Independent Power Plant Project in Vietnam: https://www.koreaexim.go.kr/site/program/board/basicboard/view?currentpage=43&menuid=002001007&pagesize=10&boardtypeid=284&boardid=16630
Guide to the Export-Import Bank of Korean: http://ehf.koreaexim.go.kr/File.down?file=/attach_file/conts/en/_English_guide_book.pdf
The Korean Eximbank's financial support for the coal-fired power plant project in Viet Nam has a total value of USD 620 million in project financing. The Korean company POSCO Power will participate in the project with a 30% equity investment and the operation and maintenance of the plant alongside the Korean company Doosan Heavy Industries & Construction as the EPC (Engineering, Procurement, Construction) contractor. An EPC contract is a form of export contract covering the design and construction of the plant as well as the supply of equipment.
In this context, the Bank stated: "Korea Eximbank has played a key role in the project by actively expressing financial support for the project from the early stages, organizing lenders’ group including an international commercial bank, and leading financial negotiations. Originally, project developer AES had planned to entrust plant construction to a Chinese company but switched to Korean companies after the Bank actively expressed financial support for the project."
Project Financing is provided to certain foreign large-scale projects. Repayments of such loans include preferential terms such as repayments mainly being made from the project’s own cash flow generation. Project financing loans are solely eligible for projects which include Korean companies participating as an exporter, sponsor or as an operations and maintenance contractor.
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.