Government Forms Public-Private One Team to Support Overseas Construction Orders "Annual Target of 50 Billion USD"

At the 7th Emergency Economic and Livelihood Meeting, 'Order Activation Strategy' Confirmed

[Image source=Yonhap News]

[Asia Economy Reporter Kim Min-young] The government is forming a public-private joint one-team to support winning large-scale overseas infrastructure projects such as Saudi Arabia's 'NEOM City' project and is launching comprehensive support efforts. Customized strategies will be established for promising regions such as the Middle East, and the capital limit of the Korea Overseas Infrastructure & Urban Development Corporation (KIND) will be increased fourfold. Through this, the goal is to secure $50 billion in overseas construction contracts annually and rise to become one of the world's top four overseas construction powers.

On the 31st, the Ministry of Land, Infrastructure and Transport jointly announced the "Overseas Infrastructure Contract Activation Strategy" with related ministries at the 7th Emergency Economic and Livelihood Meeting presided over by the President.

First, differentiated entry strategies will be prepared by the end of the year after analyzing the characteristics of orders and trends in promising regions such as the Middle East, Asia, and Latin America.

In particular, the Middle East, where large-scale orders are expected due to high oil prices, plans to significantly strengthen the negotiation capabilities of Korean companies through high-level diplomacy such as the Saudi Arabia visit and large-scale financial support to expand the scale of contracts. To win major projects, a project-specific public-private joint One Team Korea will be formed, and public and private sectors will actively explore package contracts encompassing infrastructure and content.

The role of the private sector will also be strengthened. To establish a virtuous cycle system for private infrastructure finance, the statutory capital limit of the Korea Overseas Infrastructure & Urban Development Corporation (KIND) will be raised from 500 billion won to 2 trillion won. This will support the acquisition of investment shares by private operators and promote amendments to the Loan Business Act to allow infrastructure loan receivables to be sold not only to domestic financial institutions but also to overseas financial institutions.

To foster advanced infrastructure companies, a new R&D project worth 270 billion won will be promoted, and the public sector will take the lead in commercializing new technologies. To strengthen competitiveness in high value-added areas such as project management (PM) and planning design, expansion of private PM participation and dissemination of 3D design systems will be pursued.

Public sector support before and after projects will also be enhanced. To proactively discover and plan projects, overseas order information scattered across institutions such as the Overseas Construction Association and KIND will be integrated and provided. Korean translation services for laws and policies of major ordering countries, along with expanded legal, tax, and financial consulting support, are planned.

Furthermore, to enhance negotiation power at the bidding stage, KIND's government-to-government (G2G) negotiation support function in the urban infrastructure sector will be strengthened, and overseas construction policy support centers currently operating in Indonesia, Vietnam, Kenya, and Bangladesh will be additionally established in promising countries such as Poland.

The interest rate on Economic Development Promotion Funds (EDPF) for government projects in developing countries will be lowered (maximum from 3.5% to 1.4%) to enable Korean companies entering overseas markets for complex development projects to secure financing smoothly.

Orders for nuclear power and eco-friendly industries will also be activated. Through the Nuclear Export Strategy Promotion Committee launched on the 18th, country-specific nuclear power order strategies will be prepared, and high-level diplomatic delegations will be dispatched to major nuclear power ordering countries such as the Czech Republic and Poland to support contract wins.

Additionally, the Export-Import Bank of Korea will sign a basic credit agreement worth $50 billion with major energy and eco-friendly project clients in the Middle East and plans to significantly expand financial support by additionally raising a 400 billion won PIS fund to support eco-friendly projects. The PIS fund refers to the Plant, Infrastructure, and Smart City fund.

Minister Won Hee-ryong said, "Korea has sufficient capabilities as an overseas construction powerhouse that sparked the Middle East boom, but it had been weakened due to low-price bidding offensives by foreign companies and the COVID-19 pandemic. As the overseas construction market is expected to be revitalized once again, we will further strengthen the contract-winning capabilities of the government, public, and private sectors, and as one team, we will work together to achieve $50 billion in annual contracts and enter the top four overseas construction powers."

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