The Korea Export-Import Bank announced on Dec. 22 that it will provide US$375 million in loans to Daewoo Engineering & Construction’s LNG plant project in Nigeria.
For the first time as a Korean company, Daewoo E&C won the LNG plant as a prime contractor in September. It will carry out the project on an engineering, procurement and construction (EPC) basis. The LNG plant market had been dominated by five or six builders from developed countries including the United States, Japan, and Italy.
The project involves building an LNG plant with an annual production capacity of 7.6 million tons and additional facilities for the plant on Bonny Island of southern Nigeria. When the plant is completed, the nation’s LNG production will soar from 22 million tons to 30 million tons annually. The project is quite significant in that small and medium-sized companies in Korea participate in this project by exporting US$70 million worth of equipment.
The US$375 million loan from the Korea Export-Import Bank will be used to pay for the construction work of Korean companies participating in the project. Apart from the Korea Export-Import Bank, the Korea Trade Insurance Corp. is considering extending a loan of a similar size. Korean export credit agencies (ECAs) are expected to provide around US$750 million to the project. This project is also the first to be supported through a special account set up by the Korean government to help Korean companies land more overseas orders.