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Kang Kyoo Bang, President of the Export-Import Bank (left in the photo), and Admassu Tadesse, President of the Trade and Development Bank (TDB) of East Africa (on the monitor in the photo), signed a $100 million loan guarantee agreement through an online video signing ceremony on the afternoon of the 14th to respond to the increase in Korea-Africa trade and investment.

[Asia Economy Reporter Kangwook Cho] The Export-Import Bank of Korea announced on the 15th that it has signed a $100 million on-lending credit line agreement with the Trade and Development Bank of Eastern and Southern Africa (TDB) to respond to the increase in Korea-Africa trade and investment. Notably, this agreement, signed the previous day, was conducted through an online video signing ceremony due to the COVID-19 pandemic.

TDB (The Eastern and Southern African Trade and Development Bank) is a multilateral development bank established in 1985 to promote intra- and extra-regional trade in East and Southern Africa. It has 22 member countries including Kenya and Tanzania, and provides trade finance, project finance, and other services. On-lending finance is a financial product where the Export-Import Bank of Korea signs a credit line agreement with a foreign bank and lends funds, which the local bank then loans to local companies importing Korean goods.

President Bang said at the event, "Africa, with its population of 1.3 billion, abundant natural resources, and young consumer base, is a market with high growth potential and strategic importance. We expect increased cooperation demand in major consumer goods exports such as automobiles and home appliances, as well as in agriculture, transportation, infrastructure, and healthcare sectors." He added, "In response to the COVID-19 situation, we plan to establish non-face-to-face business processes such as video signing ceremonies and webinars to expand policy finance support."

Last year, Korea's exports to Africa amounted to $6.3 billion, and overseas investment was $500 million, which is relatively low compared to other global markets.

However, consultations in the transportation and infrastructure sectors have been steadily increasing recently. Especially, once the African Continental Free Trade Area (AfCFTA) is fully implemented, overall Korea-Africa trade and investment by Korean companies are expected to increase. AfCFTA is an African economic community involving 54 African Union countries, aiming to create a single market by abolishing tariffs and unifying external tariffs to expand intra-regional trade. Currently, major agreements are delayed due to COVID-19.

The Export-Import Bank of Korea plans to actively utilize the total $700 million on-lending credit lines set with five African banks including TDB and Afreximbank to meet the demand of Korean companies entering Africa.

Meanwhile, the bank will also hold a "Korea-Africa On-Lending Finance Webinar" on the 30th to help African local companies expand imports and transactions of Korean products using on-lending finance.

Hosted by the Korean Embassy in Kenya and co-organized by the Export-Import Bank of Korea, KOTRA Nairobi Trade Center, and TDB, this event will be held online for one hour in the form of a video conference with about 60 participants including Korean companies operating in Africa and local importers.

This content was produced with the assistance of AI translation services.