Financial Support for Overseas Construction
Korea Trade Insurance Corporation (K-sure) announced on March 8 that it will provide 400 million euro (US$496.36 million or 532 billion won) to a project to construct a Canakkale suspension bridge in Turkey participated in by Daelim Industrial Co. and SK Engineering & Construction Co. (SK E&C).
According to the K-sure, it will offer the financial support with a medium and long-term export insurance that allows the leading firm to get a long-term loan at a low rate of interest on condition that South Korean firms take part in the project. In particular, it has also helped domestic small and mid-size material and equipment firms to enter the Turkish market along with conglomerates by providing loans on the premise of product supply.
Canakkale suspension bridge is a public–private partnership (PPP) project funded 3.1 billion euro (US$3.85 billion or 4.12 trillion won) by the Turkish government to vitalize the economy in the southwestern part.
It is a high-reward investment development project won by a South Korean and Turkish consortium, including SK E&C and Daelim Industrial, as well as the build, operate, transfer (BOT) project. South Korean companies succeeded in receiving the order with its advanced technology and financial conditions, beating out Japanese, Italian and Turkish firms.
With the project for Canakkale Suspension Bridge to be the world’s longest bridge with a distance of 2,023 meters between towers, South Korean builders proved to have the most advanced bridge construction technology.
In addition, the K-sure will provide an opportunity to South Korean financial institutions, including the Korea Development Bank (KDB), to participate in developing country investment development projects dominated by foreign firms. Moon Jae-do, president of the K-sure, said, “The overseas construction market is changing to investment and development projects in where not only technology but also financing abilities are important. The K-sure will focus on helping domestic companies to obtain more investment development projects as well as domestic financial institutions to take part in foreign projects in the future.”