|A render of LNG plants in Mozambique / Courtesy of Mitsui|
The Export-Import Bank of Korea (Eximbank) said Monday it will provide $500 million (545 billion won) in financial support for a major integrated liquefied natural gas (LNG) project in Mozambique.
The project financing by the state-run lender is aimed at helping Korean companies successfully complete the construction of two LNG plants in the southern African nation.
Daewoo Engineering & Construction and a group of small- and medium-sized Korean firms are participating in the project, according to Eximbank.
The total value of the project is about $23.5 billion. When the project is finished, about 12.9 million tons of LNG will be produced from the plants annually. This amounts to 23 percent of Korea's annual LNG imports, the lender said.
"We expect the project to create 1,300 new jobs annually and promote foreign exchange earnings," an official from the lender said. The Korean construction and equipment manufacturers taking part in the project plan to invest $550 million in the five-year project.
Eximbank also said it expects two Korean shipbuilders ― Hyundai Heavy Industries and Samsung Heavy Industries ― to win orders for 17 LNG ships, though contract negotiations are still underway.
"Our participation in the project is meaningful in that Africa comes with huge growth potential, as a number of countries there are resource-rich," the Eximbank official said.
The financing also comes at a critical time when local companies are facing difficulties due to the global economic fallout of the spread of COVID-19 this year.
Despite the lingering challenges, Eximbank reaffirmed its willingness to continue its support for Korean companies in order to enhance their global competitiveness, by offering timely financial assistance.
A group of eight export credit agencies have joined the project across the globe. They include Eximbank, the Export-Import Bank of the United States, the Japan Bank for International Cooperation and SACE from Italy.
"Eximbank will keep looking for fresh opportunities for growth in emerging markets despite virus-triggered economic uncertainties, to help support Korean companies so they can expand their foothold in new territories," Eximbank official said.