The Subcommittee on Economic and Financial Affairs of the South Korean parliament approved a bill amendment on Wednesday to increase the equity limit of the Korea Export-Import Bank (Eximbank). The amendment is needed to finalize the second contract for arms exports to Poland.
Since the bill has been agreed upon by both ruling and opposition parties, it is expected to be adopted without any major objections at the full committee meeting of the Ministry of Strategy and Finance scheduled for February 23, reports the Yonhap agency.
If this happens, the amendment will be voted on by the National Assembly during the last session of this term, which will take place on February 29.
The increase in capital aims to enable increased financing of export contracts, such as arms exports to Poland.
According to the current law, Eximbank can lend up to 40% of its capital to borrowers. In July, the bank’s capital amounted to 18.4 trillion won (EUR 12.7 billion), allowing for a loan to Poland of up to 7.35 trillion won (EUR 5.1 billion). After financing 6 trillion (4.15 billion) won in the first transaction, the institution was left with only about 1.35 trillion (EUR 935 million) won for a loan to Warsaw.
As a result, it was necessary to increase the statutory capital limit to secure the second defense export contract worth 30 trillion won (EUR 20.8 billion), including 308 self-propelled howitzers K9 and 820 tanks K2, explains the “Chosun Ilbo” newspaper.
In early February, the Polish Press Agency (PAP) reported that the Minister of the Defense Acquisition Program Administration of Korea, Eon Dong-Hwan, assured the head of the National Defense Committee, Andrzej Grzyb, that “everything is heading in the right direction” regarding the Korean parliament’s approval of a higher credit limit for Poland.
Meanwhile, Deputy Prime Minister and Minister of National Defense Władysław Kosiniak-Kamysz announced on February 13 that contracts for Korean K2 tanks and K9 self-propelled howitzers would continue going ahead.
If this happens, the amendment will be voted on by the National Assembly during the last session of this term, which will take place on February 29.
The increase in capital aims to enable increased financing of export contracts, such as arms exports to Poland.
According to the current law, Eximbank can lend up to 40% of its capital to borrowers. In July, the bank’s capital amounted to 18.4 trillion won (EUR 12.7 billion), allowing for a loan to Poland of up to 7.35 trillion won (EUR 5.1 billion). After financing 6 trillion (4.15 billion) won in the first transaction, the institution was left with only about 1.35 trillion (EUR 935 million) won for a loan to Warsaw.
As a result, it was necessary to increase the statutory capital limit to secure the second defense export contract worth 30 trillion won (EUR 20.8 billion), including 308 self-propelled howitzers K9 and 820 tanks K2, explains the “Chosun Ilbo” newspaper.
In early February, the Polish Press Agency (PAP) reported that the Minister of the Defense Acquisition Program Administration of Korea, Eon Dong-Hwan, assured the head of the National Defense Committee, Andrzej Grzyb, that “everything is heading in the right direction” regarding the Korean parliament’s approval of a higher credit limit for Poland.
Meanwhile, Deputy Prime Minister and Minister of National Defense Władysław Kosiniak-Kamysz announced on February 13 that contracts for Korean K2 tanks and K9 self-propelled howitzers would continue going ahead.
