 European Bank for Reconstruction and Development first vice-president Varel D. Freeman, left, and Korea International Trade Association vice-chairman Oh Youngho, signed a memorandum of understanding to help Korean companies with business opportunities in EBRD-funded projects at the KITA office, Wednesday, southern Seoul. / Courtesy of KITA |
By Cathy Rose A. Garcia
Staff reporter
Korea is hoping to corner a bigger share of billions of dollars in projects funded by the European Bank for Reconstruction and Development (EBRD) in central European and central Asian countries.
The European bank and the Korea International Trade Association (KITA) signed a memorandum of understanding to assist Korean companies in exploring new business opportunities.
``This MOU signifies close cooperation between the two organizations to support Korean companies as they look at opportunities in the EBRD country marketplace. EBRD provides 9 billion euros in equity and debt financing every year, and this obviously represents significant amount of finance and opportunities for Korean companies to benefit from EBRD support,'' Varel D. Freeman, EBRD first vice-president and head of banking, told reporters at the KITA office, Samseong-dong, southern Seoul.
EBRD is an international financial institution that supports projects in 29 countries including Russia, Mongolia, Turkey, Ukraine, Hungary and Poland, aimed at making them open and democratic market economies. It has financed 3,400 projects worth 12 billion euros in these countries.
However, Korean companies only participated in 25 projects worth 25 million euros from 1993 to 2009, representing 0.2 percent of the total. Russian companies took a big chunk of the projects, worth 2.35 billion euros, followed by Germany (1.33 billion euros), Australia (864 million euros), Italy (821 million euros) and France (542 million euros).
Despite the financial crisis gripping some European countries, this should not dissuade Korean businesses from pursuing opportunities. Freeman said there is an optimistic economic outlook in the medium term for Europe.
``Countries as vast as Russia, with their resources, consumer and capital goods markets, Korean companies would find it as an attractive destination for their efforts... Turkey is rapidly becoming a country of the middle class, with an appetite for consumer products and immense need for capital investments. Countries like Ukraine are making impressive industrial recovery. This is a region with an important future and opportunities for Korea and Korean companies,'' Freeman said.
Last month, the EBRD and the Korea Trade-Investment Promotion Agency (KOTRA) also agreed to cooperate to support economic development and promote trade in Eastern Europe.
Meanwhile, Korea will chair the EBRD's Board of Governors for 2011, becoming the first non-European country to do so.
Kim Tae-hwan, Korea's board director for EBRD, hopes to bring an Asian perspective to the European bank.
``EBRD is operating within the EU and with the European perspective. Now it needs the perspective of Korea, an Asian country. We will do our best to come up with an agenda that reflects the voices of Korea and Asia,'' Kim told reporters.
Korea is one of the bank's founding members and currently has a 1.01 percent stake in the EBRD, which has 61 members including the United Kingdom, France and Japan.
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