Export-Import Bank of Korea
The Export-Import Bank of Korea (Eximbank) signed an agreement with the Saudi Electricity Company (SEC) for financial support worth US$3 billion (3.3 trillion won).
On March 3 (local time), Korea Eximbank President Lee Duk-hoon met with Saleh H. Alawaji, the deputy minister for Electricity, Ministry of Water and Electricity (MOWE), and the chairman of SEC’s Board of Directors, and signed an MOU.
The support of US$3 billion (3.3 trillion won) is larger than the figure of US$2.8 billion (3.08 trillion won) that Korea Eximbank had supported on four power plants in Saudi Arabia for a decade after 2005.
The SEC is the largest power utility company in the Middle East, and 81 percent of its shares are owned by the Saudi government. The company accounts for 75 percent of power generation in Saudi Arabia and is monopolizing power transmission and distribution.
Due to steady population and economic growth, Saudi Arabia will see a 4.8 percent increase in electric power demand annually by 2023. Accordingly, a new power plant, which generates an annual average of 4,000MW, is expected to be constructed.
Under the agreement, both companies will strengthen information exchange about SEC projects. Also, it will provide finances worth US$3 billion (3.3 trillion won) to projects that Korean companies have won.
In particular, the SEC can eliminate uncertainty on individual export transaction financing if F/A, which confirms credit limits and major conditions in advance, is agreed. Therefore, it will also have a positive effect on Korean companies winning projects from the SEC in the future.