Breathing New Life into Shipbuilding Partners: Public-Private Partnership to Supply 16 Trillion Won in Mutual Growth Trade Finance

1 Trillion Won Supply Chain Guarantee Program Launched for Shipbuilding
HD Hyundai, Hanwha Ocean, Samsung Heavy Industries Participate
Expanded Financial Support for Small- and Medium-Sized Exporters

The Ministry of Trade, Industry and Energy and the Financial Services Commission will supply a total of 16 trillion won in mutual growth trade finance to support the shipbuilding industry and small- and medium-sized exporters. This public-private partnership model, which brings together major shipbuilders, commercial banks, and policy finance institutions, aims to accelerate the stabilization of the shipbuilding supply chain and strengthen export competitiveness.

On May 13, the Ministry of Trade, Industry and Energy and the Financial Services Commission held a "Mutual Growth Trade Finance Agreement Ceremony" at the Ulsan Hyundai Lahan Hotel and announced plans to expand the supply of mutual growth trade finance to a scale of 16 trillion won.

Attendees at the event included Kim Jungkwan, Minister of Trade, Industry and Energy; Lee Eokwon, Chairman of the Financial Services Commission; Jang Youngjin, President of Korea Trade Insurance Corporation; as well as representatives from HD Hyundai Heavy Industries, Hanwha Ocean, Samsung Heavy Industries, and the CEOs of Hana Bank, Woori Bank, and Shinhan Bank.

First, the government, the shipbuilding industry, and the financial sector will launch a 1 trillion won shipbuilding supply chain guarantee program to strengthen the export competitiveness of K-Shipbuilding and stabilize the supply chain. Hanwha Ocean and Woori Bank, as well as Samsung Heavy Industries and Shinhan Bank, will each contribute 21.3 billion won, for a total of 42.6 billion won in new funding to the Trade Insurance Fund.

Previously, in January, HD Hyundai Heavy Industries and Hana Bank also agreed to contribute 5 billion won and 23 billion won, respectively. Based on these contributions, the Korea Trade Insurance Corporation plans to provide a total of 1 trillion won in trade finance to shipbuilding equipment suppliers and partner companies.

Partner companies will be able to receive loans for up to three years at preferential interest rates up to 2.5 percentage points lower than before. The guarantee fee rate will also be lowered to around 0.7%, and the guarantee limit will be expanded. The government expects this will help alleviate the financial burden on small partner firms and enable major shipbuilders to secure a stable supply chain for equipment.

In addition, Hana Bank, Woori Bank, Shinhan Bank, and the Korea Trade Insurance Corporation will expand the scale of productive trade finance for small- and medium-sized enterprises to a total of 15 trillion won.

Commercial banks are operating preferential loan programs for export companies in cooperation with the Korea Trade Insurance Corporation. Going forward, they plan to strengthen cooperation on risk management, including joint identification of overseas business opportunities and the use of importers' credit information.

The government also plans to expand this mutual growth trade finance model beyond the shipbuilding industry to other sectors. In particular, by utilizing trade insurance, it becomes possible to supply finance on a larger scale than the private sector's contributions alone, with the aim of establishing a public-private partnership-based supply chain finance model.