November 25, 2024

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The headquarters of Export-Import Bank of Korea in Seoul (Export-Import Bank of Korea)

The state-run Export-Import Bank of Korea said Thursday that it has launched a Saudi Arabia desk to ramp up support for local firms expanding their businesses in the Middle East.

According to the bank, the new desk will take charge of coordinating and supporting the private sector, not just within Saudi Arabia, but in the Middle East overall.

While the team will be based in Seoul, an employee will be dispatched to Saudi Arabia's capital, Riyadh, and will collaborate closely to discover new opportunities for businesses and build networks in the Middle East.

The move comes as local firms seek to increase their presence in the region by participating in Saudi Arabia's national megacity development project, which is a part of the country's "Vision 2030" plan, aimed at growing into a manufacturing economy less reliant on oil.

Saudi Arabia is Korea’s biggest trading partner in the Middle East. The country was Korea's second-biggest market in 2023 in terms of construction exports, having secured a total of $9.5 billion in orders.

The lender said its role as a state-funded bank will become more important as Korean companies look to expand their footing in mega-scale, high-value-added fields like infrastructure development and renewable energy, where financial support is needed in advance in order to win contracts.

"Saudi Arabia is one of the most anticipated markets for large-scale projects in the infrastructure and eco-friendly energy fields," an Eximbank official said, adding, "The bank plans to offer comprehensive financial support (for companies) to extend the new Middle East boom and to achieve the government's goal of winning $57 billion in overseas orders this year."

In October, South Korea clinched business contracts and memorandums of understanding worth $20.2 billion during President Yoon Suk Yeol's trip to Saudi Arabia and Qatar, raising hopes for another wave of business deals in the Middle East, following the construction boom that had galvanized South Korea in the 1970s.

According to Eximbank, it has provided approximately $161 billion worth of financial support for businesses in the Middle East to date, including $39.6 billion in Saudi Arabia, $35.5 billion in the United Arab Emirates, and $14.4 billion in Qatar.

Last year, it inked a mega-deal with Saudi Aramco for a $6 billion loan agreement, following another $5 billion framework deal with the Abu Dhabi National Oil Company in 2022.

By Choi Ji-won (jwc@heraldcorp.com)