Eximbank signs $50 mil. credit agreement with CABEI

Eximbank CEO Bang Moon-kyu, left, poses after signing a credit agreement with CABEI Executive President Dante Mossi, at the former's headquarters in Seoul, Thursday. Courtesy of Eximbank

By Lee Min-hyung

The Export-Import Bank of Korea (Eximbank) signed a credit agreement worth $50 million (55.75 billion won) with the Central American Bank for Economic Integration (CABEI), in a move to support anti-COVID-19 measures for five countries in the region, the Korean lender said Sunday.

Under the agreement, CABEI will finance public sector purchases of medical devices and anti-coronavirus equipment for the countries: Guatemala, Honduras, El Salvador, Costa Rica and the Dominican Republic.

“This is the first time that Eximbank has provided the Economic Development Cooperation Fund (EDCF) for an international finance development organization,” Eximbank CEO Bang Moon-kyu said. “We expect the five countries there to take proactive steps against the coronavirus, and the credit support will also contribute to mitigating the spread of the virus in the region.”

The Korean government established the EDCF in 1987 aiming to enhance economic cooperation with developing countries. Eximbank is responsible for operating the fund.

CABEI Executive President Dante Mossi also spoke highly of the credit support from the Korean state-run lender.

“This new facilitation will contribute significantly to addressing and mitigating the pandemic's effects in our region and, in turn, to structuring programs and projects to support national plans designed by health authorities,” he said. “Undoubtedly, the Korean experience in handling the pandemic should serve as an example for us to replicate some of the measures and structures to face this type of crisis.”

CABEI also pledged for “timely financing” to support the emergency response to COVID-19 in the five countries.

Korean financial authorities, such as the Ministry of Economy and Finance and Eximbank, have offered financing and non-reimbursable cooperation worth up to $750 million, according to CABEI.

In 2019, Korea became a regional partner of CABEI and has since had a subscribed capital of $63 million.

The Korean government has increased its financing or credit support for developed countries since early 2020 amid the pandemic shock.

The government decided to set the EDCF support volume at $400 million in 2020 and raised the figure to $600 million in 2021 amid surging demand for financial support from developing countries due to the worldwide impact of the pandemic.

In January, Korea also announced plans to hike the support to $1 billion until the end of 2025, which Eximbank expected will help Korean biotechnology companies expand their footholds in overseas markets.