The Export-Import Bank of Korea announced on Oct. 1 that it has made an equity investment of US$7.15 million in the Semangka Hydroelectric Power Plant Construction and Management Project in Indonesia, which is led by the POSCO Engineering Consortium. Additionally, the bank is going to provide US$132.9 million in project financing, including loans and guarantees.
The project is to build a 54 MW-capacity conduit-type power plant at the Semangka River located in the Tanggamus region in southern Sumatra Island. The power generated there will be supplied to the island. The total construction costs will reach US$190 million, and the construction is scheduled to be finished in 2017.
This investment project is especially meaningful because it is the first overseas investment of the bank since the revision of the Export-Import Bank of Korea Act earlier this year to relax the restrictions on its equity investment. Before the revision, the bank had to obtain approval from the Ministry of Strategy and Finance for every single case of overseas investment. However, regular reporting now takes the place of the procedure. The bank is planning to invest US$35 million abroad in total this year.
“We will accelerate our overseas investment based on the amendment and make more aggressive equity investments abroad so as to attract more financial investors and provide them with various incentives,” the bank explained.