Welcome Rain in a Drought

A Neom City site in northwestern Saudi Arabia

The Export-Import Bank of Korea (Korea Eximbank) will provide financial support for a high-tech new city project in Saudi Arabia won by a consortium of Hyundai E&C and Samsung C&T.

The state-run bank sent a letter of intent (LOI) to the client of the Neom City project that it will provide a loan to the two Korean builders.

The Neom City project involves developing a new city on a site covering 26,500 square kilometers in the northwestern part of Saudi Arabia. The city’s size will be 43 times that of Seoul. The total project cost is about US$500 billion (645 trillion won). The Hyundai E&C and Samsung C&T consortium won the railway tunnel construction part of The Line, a major part of the Neom City project. The order amount is estimated at US$1 billion.

To help Korean companies win the project, the Korea Eximbank signed a basic loan agreement worth US$11 billion (about 13.1 trillion won) with banks in the Middle East at the beginning of this year. 

The Neom City project is meaningful in that the order was landed at a time when Korean contractors are suffering an order drought. According to the International Contractors Association of Korea, the total amount of overseas construction orders won by Korean contractors from Jan. 1 to June 16 of this year stood at only US$10.6 billion, down 15.2 percent from the same period of 2021. In particular, they booked only a few orders from the Middle East.

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