South Korea plans to bolster the country’s financing capabilities, aiming to back its firms with more plant-building projects overseas, the government said Wednesday.
The government said it is planning to launch a task force led by the Ministry of Strategy & Finance, in collaboration with the Ministry of Knowledge Economy and financial institutions such as Financial Services Commission, Ex-Im Bank and K-Sure, a state-run trade insurer.
The task force will operate a permanent body which spearheads the country’s plant exports, particularly those of nuclear power plants. It will be in charge of financing, strategic planning and promoting cooperation among involved institutions, the finance ministry said.
“The latest scheme was devised as financing has emerged as a significant factor for plant exports to developing economy nations,” ministry officials said.
Plants export initiatives which have been led mostly by state-run Korea Electric Power Corp. have been showing its limitations, they added.
The country’s move comes after it lost nuclear deals with Vietnam and Turkey to Japan in October and December, respectively, due to its weakness in such regard.
Korea inked a landmark $20 billion deal with the United Arab Emirates in December 2009 to build four nuclear reactors in Braka, 300 kilometers west of Abu Dhabi, by 2020.
Although the country’s first-ever nuclear facility export initiated upbeat speculations for the nation to become a major player in the global nuclear energy market, it has not won any additional contracts so far.
Alongside the body, the government is said to be considering establishing firms specializing in nuclear power plant exports, and engineering, procurement and construction of facilities.
Meanwhile, the Korean government is still yet to clarify skepticism regarding the UAE deal, including its completeness and the Ex-Im Bank loan to the Arab nation.
On Tuesday, opposition Democratic Party members at the provisional National Assembly’s Knowledge Economy Committee posed a possibility of an additional contract to be signed by the two countries.
State-run Korea Electric Power Corp. rebutted the committee’s assertions, saying that the deal was finalized and construction had already been launched.
“The UAE nuclear deal was signed by the KEPCO and Emirates Nuclear Energy Corp. on Dec. 27, 2009. It is not true that we are yet to sign a final contract,” KEPCO said in a statement.
The KEPCO added that though the firm is interested in acquiring a stake in a company which will operate the facilities after they are completed, contracts for the matter are completely separate from the one for their construction.
The Export-Import Bank of Korea providing $10 billion in loans for Abu Dhabi’s nuclear project, a sum that almost covers the financing targets sketched out by the UAE, also remain controversial.
The UAE is to repay the amount which was lent at a relatively low rate over almost 30 years, which was considered an overly favorable gesture by Korea. The state-run bank increased its fundraising target to $8.8 billion last week, saying that it plans to raise more funds through bonds and loans.
Yet Knowledge Economy Minister Choi Joong-kyung refuted such suspicions.
“It is a general practice to combine exports of big-sized infrastructure with financial leases. Other contenders in the bid have made similar loan offers as well,” he said.
KEXIM chairman Kim Yong-hwan said Wednesday that it will finalize the financial conditions for the UAE nuclear deal by the end of the year.
President Lee Myung-bak will pay a visit to the UAE March 12-14 to attend the groundbreaking ceremony for the nuclear power plants, according to Lee’s office Cheong Wa Dae.
By Koh Young-aah (firstname.lastname@example.org