SUEUN Provides Financial Support Worth Approximately 370 Billion KRW for Norwegian Expressway Project Awarded to Korean Companies

"The Foothold for Entering the Northern European Market"

On the 28th, the Korea Export-Import Bank in Yeongdeungpo-gu, Seoul, where a COVID-19 confirmed case occurred, is quiet. Photo by Moon Honam munonam@

[Asia Economy Reporter Yoo Je-hoon] The Export-Import Bank of Korea announced on the 24th that it will provide local currency financing worth approximately KRW 370 billion through project finance (PF) for the construction and operation project of Norway's Sotra Highway No. 555, in which SK Ecoplant is participating. The bank will provide loans (NOK 2 billion) and guarantees (NOK 700 million) in Norwegian krone, accounting for about 50% of the total long-term borrowings.

This project is a large-scale infrastructure project worth approximately KRW 2.2 trillion, involving the construction and operation of a total 40 km road including access roads to Bergen, Norway's second-largest city, and about 1 km of the Sotra suspension bridge. The client, the Norwegian Public Roads Administration (NPRA), plans to pay 60% of the construction costs as construction subsidies during the construction period.

Previously, SK Ecoplant formed an investment consortium with Australia's Macquarie and Italy's Webuild in July last year to participate in the bidding for this project. The Export-Import Bank of Korea also issued a letter of credit (LOC) guaranteeing large-scale long-term local currency financing to support the consortium including SK Ecoplant from the bidding stage.

The Norwegian Public Roads Administration promised the winning consortium a fixed income payment through an availability payment (AP) method during the road operation period to encourage private sector participation. AP is a fee paid by the public sector to the private sector regardless of road traffic volume as compensation for providing construction and operation services. Since AP is paid in local currency, the ability to secure large-scale local currency financing at the bidding stage was an important factor in winning the project, according to the bank.

An official from the Export-Import Bank of Korea said, "This project is a case where our construction companies and financial institutions cooperated based on accumulated overseas project experience to pioneer the Nordic PPP infrastructure market for the first time, and it is expected to serve as a foothold for our companies' entry into the Nordic market in the future."

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