Bill to Increase Soo-eun Capital from 15 Trillion to 25 Trillion Passed in Plenary Session... Expectations for K-Defense Exports

The bill to increase the statutory capital limit of the Export-Import Bank of Korea (KEXIM) from the existing 15 trillion won to 25 trillion won has passed the plenary session of the National Assembly. This bill's passage is expected to revitalize South Korea's defense exports.

The amendment to the Export-Import Bank Act, which focuses on raising the statutory capital limit of the Korea Export-Import Bank, is being passed in the National Assembly plenary session on the 29th.
[Image source=Yonhap News]

The amendment to the Export-Import Bank Act was approved on the afternoon of the 29th during the plenary session, with 148 votes in favor, 29 against, and 34 abstentions out of 211 members present. Since the 2014 amendment, the statutory capital has been capped at 15 trillion won, making it difficult to expand defense exports. According to the enforcement decree of the Export-Import Bank Act, credit extensions exceeding 40% of the capital, i.e., over 6 trillion won, to individual entities are prohibited. According to industry sources, most of KEXIM's 6 trillion won capital was exhausted in the first export contract of weapons to Poland.

However, with the general election scheduled for April, the processing of this bill was delayed for more than six months. Concerns arose that if the bill was not processed before the election, it would have to be reintroduced in the next National Assembly, potentially leading to the reduction or cancellation of the second export contract to Poland.

With the passage of the amendment, credit extensions of about 10 trillion won will be possible to individuals or companies, and an additional 4 trillion won in credit is expected to be extended to Poland. Furthermore, if financial support is provided together with the Korea Trade Insurance Corporation, loans totaling around 8 trillion won will be possible. Accordingly, the push for the second execution contract with Poland is expected to gain momentum. Additionally, exports of K-defense are also expected to expand. LIG Nex1 is advancing exports of the Cheongung II to the Middle East, and Korea Aerospace Industries (KAI) is actively exporting the Surion and FA-50, among others.

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