SUEUN Provides $760 Million Financial Support for Panama Metro Project
Medium- to Long-Term Export Receivables Purchase Method
[Asia Economy Reporter Kim Jin-ho] The Export-Import Bank of Korea announced on the 17th that it will support $760 million through a medium- to long-term export receivables purchase method for the Panama Metro Line 3 project, which was awarded to Hyundai Engineering & Construction and others.
The bank will provide support by discounting and purchasing payment guarantees issued by the Panama Metro Company according to the progress rate and paying Hyundai Engineering & Construction and others in advance. This method, widely used in medium- to long-term infrastructure projects in Latin American regions such as Panama, Peru, and Colombia, allows contractors to recover construction payments early.
The Panama Metro Line 3 project is a large-scale infrastructure project worth $2.8 billion to build a 25 km elevated railway (monorail), 13 stations, and one vehicle depot within Panama City, the capital of Panama. In 2019, Hyundai Engineering & Construction, POSCO Engineering & Construction, and Hyundai Engineering formed a consortium under the 'Team Korea' approach to participate in the project bidding.
The Export-Import Bank of Korea provided superior financial competitiveness to ensure the successful entry of the Hyundai Engineering & Construction consortium into Panama. From the bidding stage, it issued a 'Letter of Intent for Financial Support' with the most competitive financial terms within the lending group to enhance the consortium's competitiveness in winning the contract.
The bank plans to purchase $760 million worth of export receivables over the next five years to help the Hyundai Engineering & Construction consortium recover construction payments early.
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An official from the bank said, "The newly introduced medium- to long-term export receivables purchase financing is expected to significantly help domestic companies enhance their financial competitiveness in the Latin American infrastructure market, which has been led by Spanish and Chinese construction companies, and secure additional infrastructure projects in Latin America."
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