EFIC media release - 21 February 2012
SEOUL, KOREA - Australian companies exporting or investing overseas can benefit from a reciprocal risk participation agreement (RRPA) signed between the Export Finance and Insurance Corporation (EFIC) and the Export-Import Bank of Korea (KEXIM).
This is particularly important for Australian exporters who are looking to obtain finance for projects in which companies from Australia and Korea are working together in Australia or a third country.
Only one set of documents needs to be negotiated with the institution providing the loan, which then enters into a separate risk-sharing agreement with the other lender. Risk sharing agreements mean that the participants can pool resources to meet the financial needs of the companies requiring support.
This can free up capacity to support more exports, and it also will allow EFIC and KEXIM to jointly finance large projects that are beyond the capacity of commercial lenders or a single institution.
EFIC’s CEO and Managing Director, Angus Armour said “We have signed an agreement that will make collaborating to finance projects easier and more effective, which have beneficial interests to our countries and Australian exporters.”
“In the current economic environment viable international opportunities can be at risk due to tighter bank financing. The debt finance needed for even large domestic projects with an export focus can be beyond what banks can currently provide, so companies turn to ECAs or EXIM Banks as an alternative of long term finance,” he concluded.
The bi-lateral RRPA between EFIC and the KEXIM follows a multi-lateral framework agreement endorsed by the Asian EXIM Banks Forum at its 16th Annual Meeting in October 2010 in Busan, South Korea. The Asian EXIM Bank Group is made up of EFIC and the EXIM Banks of China, India, Indonesia, Japan, Korea, Malaysia, The Philippines and Thailand and Vietnam Development Bank.
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