Transcript PowerPoint Template - SMART Advisory Limited

Accessing Korea Eximbank Facility
Afreximbank Workshop on Special Products
Cairo, Egypt
2 December 2010
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Table of Contents
SECTION 1
Introduction to Korea Eximbank
SECTION 2
Interbank Export Credit Facility at Afreximbank
SECTION 3
Recent Trends in Korea-Africa Trade
SECTION 4
The Way Forward
SECTION 1
Introduction to Korea Eximbank
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Korea Eximbank at a Glance
Mission
As official Export Credit Agency (ECA), KEXIM aims to provide financial
supports for Korean trade and overseas investment, and to promote
international economic cooperation with developing countries.
Profile
 Established in 1976 pursuant to the Export-Import Bank of Korea Act
 100% Owned by the Government
 Total Asset : KRW45.6trn (equiv. to U$37.7bn) (1)
 Total Paid-in Capital : KRW5.2trn (equiv. to U$4.3bn) (1)
 Total Equity : KRW6.6trn (equiv. to U$5.5bn) (1)
(1) As of 31 December 2009.
KRW/USD exchange rate = KRW 1,210.3 to USD 1.00 as of 30 June 2010. Source : Bloomberg
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Business Areas with Policy Mandates
1
2
Export Credits

Provision of loans
to facilitate Korean
exports.
Administration
of Government
Funds
3
4
Overseas Investment
Credits

Loans to finance
Korean overseas
investments and
projects.
Economic
Development
Cooperation
Fund (“EDCF”)
Import Credits

Extension of loans
to finance Korean
imports of
essential materials
and natural
resources.
Inter-Korean
Cooperation
Fund (“IKCF”)
Guarantee facilities

Support the
obligations of
Korea’s overseas
business.
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Financing Overview
Overseas Inv’t
Guarantee
Investment Loan
Business Loan
Project Loan
Natural Resources
Development Loan
▪ M&A Financing,
Arranger
▪ Financial
▪ Project-related
- Bid
- A/P
- Performance
- Warranty etc
Export
Domestic
▶ Short term export
- Export Loan
- SME export loan
- Special export loan
for SMEs
▶ Long term export
Foreign
- Pre-shipment
- Deferred payment
▪ Direct Loan (PF, SF)
▪ Inter-bank Loan
▪ Untied Two-Step Loan
▪
▪
▪
▪
Import
▪ Natural Resources,
Industrial Facilities
 Bond
 Equity
Trade Finance
▪
▪
▪
▪
Rediscount
Factoring
Fortfaiting
L/C related
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Long-term Export Financing
Supply Credit (Domestic entities)
1. Export Contract
2. Loan
Supplier
(Exporter)
KEXIM
4. Repayment
Buyer
(Importer)
3. Payment
Buyer Credit (Foreign entities)
4. Payment
KEXIM
5. Repayment*
Supplier
(Exporter)
1. Export Contract
3. Shipment
2. Loan
* Deferred payment
Buyer
(Importer)
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Long-term Export Financing (Re-lending)
Inter-bank Loan
1. Credit Line
Foreign Bank
KEXIM
5. Repayment
3. Loan
5. Repayment
4. Remit
Exporter
2. Shipment
Importer
Untied Two-Step Loan
2. Sub-loan
Korean
Subsidiary
1.Credit Line
Foreign Bank
KEXIM
Supply Contract
4. Repayment
3. Sub-loan
Local Buyer
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Overseas Investment Financing
※ Overseas Investment Credit (OIC)
- Provides loans to Korean companies engaged in business outside Korea
Investment Loan
Korean
Company
Loan
- Cap. Injection
- Loan
KEXIM
Business Loan
Loan
KEXIM
Korean Co’s
Subsidiaries
Foreign
Company
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EDCF (Economic Development Cooperation Fund)
Types of Loans






Development project loan
Two-Step loan
Equipment / commodity / compact loan
Project preparation loan
Co-financing with MLAs and bilateral DFIs
Tied or untied facility
Grants : Technical Assistance





Special Support for EDCF loans
Grant for Feasibility Studies, etc.
Technical Assistance via Trust Funds
Capacity Building Programs by EDCF
EDCF Annual Workshop
< Loan Procedure >
Identification
Post
Evaluation
Preparation
Implementation
Appraisal
Loan
Agreement
Gov’t
Agreement /
Arrangement
Gov’t
Approval
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KEXIM’s Financial Support on Africa – Disbursements
 In 2010, KEXIM supported 31 countries, amounting total of U$1,348 Mn
 3.1% out of KEXIM’s total disbursement
 Scaling up Plan : Doubling financial support on Africa by 2012 (compared to 2009)
< Disbursements to Africa (2005~2010) >
(U$ Mn)
1,348
1,500
1,208
1,123
917
1,000
782
623
500
0
2005
2006
2007
2008
2009
2010.3Q
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Major Projects Supported
Country
Project
Amount
(U$Mn)
Funding
Source
Year
(Approved)
Angola
Construction of Industrial Advanced
Technology Center
34.8
EDCF(ODA)
2010
Cameroon
Establishment of Advanced Vocational
Training Center
35
EDCF(ODA)
2008
Kenya
Technology Development Center Extension
10.7
EDCF(ODA)
2007
Madagascar
Ambatovy Nickel Mining Development
1,251
Project Finance
& OIC
2007~2010
Mozambique
Construction of Photovoltaic Power Plants
35
EDCF(ODA)
2010
Niger
Teguidda Uranium Mining Development
15
Overseas
Inv’t Credit (OIC)
2010
Senegal
Government ICT Infrastructure
25
EDCF(ODA)
2007
Tanzania
Construction of Muhimbili University of
Health and Allied Sciences Medical Center
49.5
EDCF(ODA)
2009
SECTION 2
Interbank Export Credit Facility at Afreximbank
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What is Interbank Export Credit?
A trade finance package through which KEXIM provides Credit
Lines to foreign banks to help foreign buyers obtain credit for the
purchase of Korean goods and services.
Global Operation : 44 banks in 22 countries
CIS ∙ EUROPE
MIDDLE EAST
Iran
Turkey
Russia
Kazakhstan
Uzbekistan
Ukraine
Azerbaijan
SOUTH AMERICA
AFRICA
ASIA
CABEI
CAF
Brazil
Chile
Colombia
Guatemala
Panama
Peru
Dominican Republic
Mexico
Afreximbank
Nigeria
South Africa
India
Philippines
Vietnam
Indonesia
Mongolia
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Interbank Export Credit Agreement with Afreximbank
Main Contents
 Credit Line Amount : U$50 Million
 Eligible Transactions :
- Purchase of Korean goods and
services by African Importers
 Eligible Countries :
- Member Countries of Afrexim
 Loan Tenor : 2 ~ 5 years
 Pricing : Fixed Pricing
(CIRR + Exposure Fee)
 Maximum Financing Ratio :
- 85% of Contract Amount
 Repayment :
- Semi-annual installments
2010 KOAFEC Ministerial Conference
September 15th, 2010
Seoul, Korea
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Flow of Loans – Standard
Credit Line (U$50 Million)
① Loan
KEXIM
Afrexim
② Sub-Loan
Korean
Exporter
Trade Transaction
Sales Contract
African
Importer
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Flow of Loans – Relending through Local Bank
Credit Line (U$50 Million)
① Loan
KEXIM
Afrexim
② Sub-Loan
<※ Relending Criteria >
 Local Bank must :
Local
Bank
③ Sub-Loan
Korean
Exporter
Trade Transaction
Sales Contract
African
Importer
- be a Member Country of
Afrexim
- obtain prior approval
from Afrexim, with
the consent of KEXIM
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Benefits
Afrexim /
Local Banks
African
Importers
Korean
Exporters
 Can acquire funding at an internationally competitive rate
 Can expand business operations with corporate clients
 Can secure low-cost financing with suitable tenor and
flexible repayment schedules
 Can secure receipt of payment without any credit risk on
the importer or the importer’s country
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How to Utilize KEXIM Credit Line
1
Identify eligible transactions.
2
Discuss terms and conditions of the individual loan
with KEXIM (through Afrexim).
Pricing / tenor / repayment schedule will be negotiated
at this stage.
3
Upon consensus on terms and conditions, submit
loan application to KEXIM (through Afrexim).
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Disbursement : L/C Procedure
1
L/C Procedure
Credit Line (U$50 Million)
① Loan Application/Approval
KEXIM
※ In case Local Bank
② L/C Issue
Afrexim
④ Loan
⑤-1 Loan
③ Negotiation
& Payment
⑤-2 Loan
Local
Bank
Korean
Exporter
African
Importer
Shipment
opens L/C,
- Local Bank must
obtain prior
authorization from
Afrexim, with the
consent of KEXIM
- It should be noted in
the L/C that it is
opened pursuant to
Master Interbank
Export Credit
Agreement between
KEXIM and Afrexim
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Disbursement : Reimbursement Procedure
2
Reimbursement Procedure
Credit Line (U$50 Million)
K-EXIM
① Loan Application/Approval
※ In case Local Bank
③ Disbursement Request
makes payment,
Afrexim
④ Reimbursement
②-1 Payment
Local
Bank
Korean
Exporter
②-2
Payment
⑤ Loan
African
Importer
Shipment
- Local Bank must obtain
prior authorization from
Afrexim, with the
consent of KEXIM
- It should be noted in
the Sub-loan agreement
(between Afrexim and
Local Bank) that the
loan is made pursuant
to Master Interbank
Export Credit
Agreement between
KEXIM and Afrexim
SECTION 3
Recent Trends in Korea – Africa Trade
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Korea-Africa Trade Volume
 Steady growth in Export (Korea → Africa) : ’04-’09 CAGR 8.5%
 By Sector : Ship, Automobiles, Plastics amount 73%
 By Product : Growing Demand in Automobiles, IT & Telecommunications,
Green Energy & Natural Resources Development
(U$ Bn)
Import
Export
< By Sector >
14
Others
24.4%
12
10
8
6
4
2
0
Wireless
Comms
2.5%
Plastics
5.2%
Automobiles
8.4%
59.5%
Ship
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Major Korean Exporters
Ship
Automobiles
Electronics /
Telecom
Chemical /
Plastics
Auto Parts /
Components
SECTION 4
The Way Forward
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KEXIM’s Policy
Credit Line
 In line with financing demands, KEXIM will increase
the amount of Credit Line at Afreximbank.
 KEXIM will continue its financial support for Africa, as
Korea-Africa trade transactions continue to expand.
Continuous
Support
System
Improving
 KEXIM is interested in utilizing Afrexim credit line in
supporting accompanying transactions related to
mega projects & ODA projects that KEXIM finances.
 KEXIM is open for any recommendations and
suggestions for improvement.
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Thank you for your kind attention!
Contact
Kwanghyun Byun
Interbank Export Finance Department
Korea Eximbank
+82-2-3779-6371
[email protected]
www.koreaexim.go.kr