On September 16, Korea Eximbank announced that it provided a total of US$117 million to sponsor the Akkas Gas Field Development Project in Iraq signed between Korea Gas Corporation and Daewoo E&C.
This sponsorship includes a refund guarantee of US$46 million and performance guarantee of US$71 million.
A refund guarantee means the financial institution makes the payment when the constructor has to return the advance payment to the ordering body. A performance guarantee means the financial institution makes a partial payment of the full contract amount when the constructor does not complete the requirements of the contract made with the ordering body.
This project was ordered by KOGAS AKKAS B.V., that is a project corporate of Korea Gas Corporation. The total capital needed for the project is US$790 million. It is private company Daewoo E&C’s first business in Iraq. For the next 46 months, Daewoo will be building a central management facility and others at the Akkas gas field located in the northwestern Al Anbar Governorate.
An official of Korea Eximbank said, “This guarantee will serve as a role model of a private, public and financial cooperation for international resource development, since the project is ordered by public company Korea Gas Corporation, signed by private company Daewoo E&C, and guaranteed by a financial institution, Korea Eximbank.”