Export-Import Bank Provides $1.19 Billion PF for Refinery Facilities in Balikpapan, Indonesia

[Asia Economy Reporter Buaeri] The Export-Import Bank of Korea announced on the 16th that it signed an agreement on the 15th to support project finance (PF) worth $1.19 billion (approximately 1.5621 trillion KRW) for the expansion project of the Balikpapan refinery plant with Pertamina, the Indonesian state-owned oil and gas company.

PF is a financial technique that raises funds by using the future cash flows of a project as the main repayment source for loans, and securing the project’s assets and rights as collateral.

The signing ceremony held at the Embassy of Indonesia in Korea was attended by Zelda Ulan Kartika, Deputy Ambassador of Indonesia to Korea, Taufik Adityawarman, CEO of KPI (a subsidiary of Pertamina in refining and petrochemicals), and Kim Hyung-jun, Head of the Project Finance Division at the Export-Import Bank of Korea.

The Balikpapan refinery expansion project in Indonesia involves expanding and upgrading the refining facilities operated by Pertamina in the southeastern part of Kalimantan Island, with Hyundai Engineering and others having secured a total construction contract worth $4.4 billion.

The project company KPB (a Pertamina granddaughter company) plans to use the PF provided by the Export-Import Bank of Korea to pay Hyundai Engineering for the construction costs.

The Export-Import Bank of Korea stated that this project is expected to generate significant foreign currency earnings, including exports of approximately $1 billion worth of domestically produced goods and services from numerous small and medium-sized Korean companies.

Head Kim said, "Next year marks the 50th anniversary of diplomatic relations between Korea and Indonesia, and we will strengthen the strategic partnership through policy finance. In particular, we will build a closer cooperative relationship with Pertamina, a major overseas client, so that Korean companies can win future Indonesian projects, and the Export-Import Bank of Korea will serve as a bridgehead."

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