kexim’s role in the pf market - asian exim bank · pdf filekexim’s role in the pf...

June 2014

KEXIM’s Role in the PF Market With Case Studies in Petrochemical and Refinery Projects

1

This presentation has been produced by The Export-Import Bank of Korea (“KEXIM”) solely for information

purposes.

KEXIM does not make any representation or warranty as to the accuracy or completeness of this

information.

This presentation is highly confidential and must not be copied, reproduced, published, distributed,

transmitted, passed or otherwise disclosed (in whole or in part) to any other person at any time without

prior consent from KEXIM. This presentation is only being made available to parties who hereby agree to

treat it as confidential and not to disclose any information contained herein.

Disclaimer

2

Recent Trends in the PF Market and KEXIM’s role 9 SECTION 2

Case Projects in Petrochemical and Refinery Financing 17 SECTION 3

Table of Contents

KEXIM at a Glance 3 SECTION 1

Lessons to learn (Key Success factors) 30 SECTION 4

SECTION 1

KEXIM at a Glance

3

4

90.0%

73.5%

48.5% 46.5%

30.9%

23.4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Korea Germany UK China Japan US

Categorized as “Sovereigns, Supranationals and Agencies” (SSA)

by financial publication such as IFR and Euroweek

Promoting international trade is

indispensable in maintaining sustainable

growth of the nation’s economy

Source: Bank of Korea, IMF, WTO

* Defined as the sum of annual exports and imports divided by Gross Domestic Product

KEXIM is an Export Credit

Agency mandated with

promoting export and

competitiveness of Korean

goods and services

100% Ownership

Official Export

Credit Agency

A 100% Government Owned Export Credit Agency

▒ Pivotal Role in the Korean Economy

Trade Dependency Ratio (2013)*

5

ECAs in Other Countries

▒ KEXIM is the Official Export Credit Agency of Korea

Korea

The Export-Import

Bank of Korea

EXPORT-IMPORT BANK

of the UNITED STATES U.S.A.

U.K.

Canada

Germany

Japan Japan Bank for International Cooperation

Australia

Sweden

http://www.kfw.de/EN_Home/index.jsp

6

LOANS GUARANTEES

Export Credit

Import Credit

Overseas Investment Credit

Total Loans: KRW54tn (as of December 31, 2013)

Financial Guarantee

Project Related Guarantee

Total Guarantees: KRW40tn (as of December 31, 2013)

On behalf of Korean Government, KEXIM administrates EDCF and IKCF, both of which are

SEPARATED ACCOUNTS FROM KEXIM

Economic Development Cooperation Fund (“EDCF”)

Since 1987

Promote economic cooperation

between Korea and developing

countries

Total Disbursement : KRW4.4tn

(as of December 31, 2013)

Since 1991

Promote exchanges and cooperation

between the two Koreas

Total Disbursement including

Grant : KRW6.0tn

(as of December 31, 2013)

▒ Government-Entrusted Funds

Inter-Korean Cooperation Fund (“IKCF”)

Key Operations

▒ KEXIM’s Own Accounts

_______________________

KRW/USD = 1,055.30, as of December 31, 2013

7

▒ Loans ▒ Guarantees

▒ Paid-in-Capital ▒ Capital Strength

Financial Highlights

6,070 9,710 9,090 10,528 12,246 13,584

26,320 27,713 32,139

37,430 35,552 40,225

32,390 37,423

41,229

47,958 47,798 53,809

0

15,000

30,000

45,000

60,000

75,000

2008 2009 2010 2011 2012 2013

(KRW bn)

Source: KEXIM, FY2013

Foreign Currency KRW

47,323 42,936 41,286 38,806 34,567 35,252

1,312 2,230 2,890

3,664 4,813

6,335

48,635 45,166 44,176 42,470

39,380 41,587

0

10,000

20,000

30,000

40,000

50,000

60,000

2008 2009 2010 2011 2012 2013

(KRW bn)


Financial Project-related

Source: KEXIM , FY2013

3,959

5,009 5,159

6,259

7,138 7,238

0

1,500

3,000

4,500

6,000

7,500

2008 2009 2010 2011 2012 2013

(KRW bn)


Basel III Standard KEXIM

Tier 1

Tier 2

Capital Conservation

Buffer

Common

Equity

Tier 1

4.5% 6.0%

8.0%

2.5% By

2019

By

2015

Tier 1

(10.4%)

Tier 2

Common

Equity

Tier 1

(10.4%)

11.6%

8

Source: Ministry of Trade, Industry & Energy, as of FY 2013

▒ Export Breakdown by Geography ▒ Export Breakdown by Product

▒ Loan by Geography ▒ Loan by Product

Loan Portfolio

U.S.11%

Japan6%

EU9%

Australia2%

Middle East6%

Southeast Asia22%

China26%

Latin America

6%

Others12%

Exports to

Emerging

Markets:

72%

Source: Ministry of Trade, Industry & Energy, as of FY 2013

Electronics31%

Automobiles & Parts13%

Petroleum-related10%

Chemical12%

Machinery10%

Steel8%

Light Industry7%

Shipbuilding6%

Others5%

Source: KEXIM, December 2013

Asia40%

Europe18%

Americas17%

Africa2%

Oceania3%

Middle East20%

Overseas

Investment

Loan 36.6

Source: KEXIM, December 2013

Export Loans 58.2%

Industrial Plants 24.6%

Shipbuilding 17.0%

Transportation 4.2%

Electronics 2.9%

Petrochemicals 2.3%

Import Loans 5.2%

Others 7.2%

9

SECTION 2

Recent Trends in the PF Market

and KEXIM’s Role

9

10

Mainly in the Middle East Diversifying to Emerging Market

Power and Petrochemicals Infrastructure, Ocean-Plant and Various Industries

Merely EPC Contractors Multi-Role Players (Sponsors, O&M, Offtakers)

More ECA financing after the European Financial Shrinking and

___Commercial Banks Liquidity Constraints

Enlargement of the Project Scale – Mega Financing

Diversification of Financing Means (Local financing, Project Bonds)

Changes in EPC Market

Changes in Finance Market

EPC Bidding then Finance Finance then EPC Bidding

Changes in the PF Market

11

Export

Contract

Korean

Sponsor

Export Credit (OECD arrangement) Overseas Business Credit

Others

Commercial Banks

SPC Korean

Exporter

P. Guarantee

Covered Loan

Overseas Business Loan

Export

Contract

Commercial Banks

Korean

Exporter SPC

P. Guarantee

Export Loan

Covered Loan

Equity Equity, O&M, etc

Non-Korean

Sponsor

KEXIM’s Participation in the PF Market

12

Export Loan (Terms & Conditions)

12

□ A Korean company participating as one of the EPC contractors

□ The terms and conditions shall be in compliance with “The OECD Arrangement on Officially Supported Export Credits.”

Payment Guarantee* Export Loan

Covered Lenders Interest Rate

Up to [100 ~ 200] % of Korean Contents (i.e., EPC Amount)

OECD Premium Rate

Up to 14 years for PF transactions regardless of sector

• Normally 10 years for low income countries • 12 years for conventional power plants (Average weighted repayment term ≤ 7. 25 yrs)

Credit Amount

Repayment

Period

Interest Rate

Premium

*Payment Guarantee cover cannot exceed 50% of total Credit Amount

KEXIM Floating (or Fixed) Rate

13

Overseas Business Credit (Terms & Conditions)

□ A Korean company participating as one of the Equity investors

Payment Guarantee* Oversea Business Loan

Covered Lenders Interest Rate

Up to [100 ~ 200] % of Korean Interests (equity participation plus EPC, O&M contract etc.)

KEXIM Required Rate

Up to 30 yrs (door to door) based on Cash Flow

Credit Amount

Tenor

Interest Rate

Premium

*Payment Guarantee cover cannot exceed 50% of total Credit Amount

KEXIM Floating (or Fixed) Rate

NEXT HITTER:

EQUITY INVESTMENT

14

Recent KEXIM Financed Projects

▒ Projects Approved in 2012

Year Project Sponsors EPC

Contractors

Total

Project Cost

(Mil)

EPC

Contract

Amount

(Mil)

Approved Amount(Mil)

Sector Type Loans

Guaran-

tees

Total

Approved

Amount

2012 Kirikkale

Power Plant Project

SAMSUNG C&T

CORPORATION,

ACWA POWER,

INFRAMED

SAMSUNG C&T

CORPORATION 969 547 90 60 150

Electricity

Generation EL, PG

2012

Operation

of the Fare Collection

and User System

for the Integrated

Public Transportation

System of Bogotá

LG C&S,

CITYMOVIL,

LAND DEVELOPER

LG CNS 201 104 67 54 121 Infra-

Structure OBL, PG

2012 Istanbul Strait Road

Tube Crossing

SK E&C,

HANSHIN

ENGINEERING

CONSTRUCTION,

YAPI MERKEZI

SK E&C,

HANSHIN

ENGINEERING

CONSTRUCTION,

YAPI MERKEZI

1,245 814 250 30 280 Infra-

Structure OBL, PG

2012

Surgil Petrochemical

And

Natural Gas Complex

KOREA GAS

CORPORATION, GS E&C,

LOTTE CHEMICAL

CORPORATION,

UZBEKNEFTEGAZ

HYUNDAI

ENGINEERING,

SAMSUNG

ENGINEERING,

GS E&C

4,105 2,626 700 300 1,000 Resource

Devel’t OBL, PG

2012

Independent

Power Plant III Project

KEPCO, WARTSILA NSD

SWITZERLAND ,

MITSUBISHI UFJ TRUST

AND BANKING CORP

LOTTE E&C,

Wartsila 812 552 320 107 427

Electricity

Generation OBL, PG

2012 ICHTHYS Project

INPEX ICHTHYS PTY ,

TOKYO GAS ICHTHYS PTY ,

OSAKA GAS ICHTHYS

DEVELOPMENT PTY ,

CHUBU ELECTRIC

POWER ICHTHYS PTY ,

TOHO GAS ICHTHYS PTY ,

TOTAL E&P ICHTHYS BV

DSME,

SAMSUNG

HEAVY

INDUSTRIES

47,600 4,600 1,050 450 1,500 Resource

Devel’t EL, PG

15




Contractors

Total

Project

Cost

(Mil)

EPC

Contract

Amount

(Mil)


Sector Type Loans

Guaran-

tees

Total

Approved

Amount

2013 Sabine Pass

Liquefaction

BLACKSTONE

CQP HOLDCO LP,

CHENIERE ENERGY, INC,

the investing public

Bechtel 12,582 7,763 420 330 750 Resource

Devel’t OBL, PG

2013 Roy Hill

Project

POSCO, MARUBENI

CORPORATION,

HANCOCK

PROSPECTING PTY,

CHINA STEEL COPORATION

SAMSUNG C&T

CORPORATION 12,037 AUS 5,609 550 450 1,000

Resource

Devel’t OBL, PG

2013

Sadara

Integrated

Chemicals

Project

DOW CHEMICAL,

SAUDI ARABIAN

OIL COMPANY

SAUDI ARAMCO

FOSTER WHEELER

ENERGY ,

LINDE AG,

TECNIMONT S.P.A.,

JACOBS

ENGINEERING

19,333 11,900 320 80 400 Petro-

Chemistry EL, PG

2013 EMAL Phase II

Project

DUBAI ALUMINIUM COMPANY,

MUBADALA DEVELOPMENT

COMPANY

SAMSUNG C&T

CORPORATION 4,486 587 240 60 300

Electricity

Generation EL, PG

2013

Construction and

Operation of

a Phosphate Mining

& Fertiliser

Complex

In Saudi Arabia

Bahrain

MA'ADEN,

MOSAIC,

SABIC

DAELIM,

HANWHA

ENGINEERING &

CONSTRUCTION

6,671 4,300 800 200 1,000 Petro-

Chemical EL, PG

2013

Nghi Son Refinery

And

Petrochemical

Project

PETROVIETNAM,

IDEMITSU KOSAN,

MITSUI CHEMICALS INC,

KUWAIT PETROLEUM

EUROPE BV

SK E&C, GS E&C,

CHIYODA, JGC,

TECHNIP

8,995 5,105 660 440 1,100 Refinery EL, PG

16




Contractors

Total

Project Cost

(Mil)

EPC

Contract

Amount

(Mil)


Sector Type Loans

Guaran-

tees

Total

Approved

Amount

2014

Sohar Refinery

Improvement

Project

OMAN OIL REFINERIES

AND PETROLEUM INDUSTRIES

COMPANY

DAELIM,

PETROFAC

INTERNATIONAL

2,700 2,100 420 180 600 Refinery EL, PG

2014

Turkmenistan

Ethane Cracker

and PEPP Plant

Project

Turkmen Gas

LG

INTERNATIONAL,

HYUNDAI

ENGINEERING,

HYUNDAI

ENGINEERING

& CONSTRUCTION

3,000 3,000 492 215 707 Petro-

chemical EL, PG

SECTION 3

Case Projects in Petrochemicals and Refinery

17

18

Development, construction, operation and maintenance of the Aromatics (such as Benzene and

Xylene) complex in the island of Jurong in Singapore. The Project aims at meeting the excess

demand of the Aromatics in the region.

Case I : Singapore Jurong Aromatics Complex Project

▒ Purpose

USD 2,537 million (Equity 22%, Debt 73%)

- USD 1,350 million for EPC Contracts

▒ Project Cost

Aromatics(1.4m tons/year), Oil refining products(2.3m tons/year)

▒ Main Product

- SponJEC(60%), SKEI(10%), Glencore(10%), Ikarus(10%), EDBI(Gov’t of Singapore, 5%), SFX( 5%)

- Project Company : JAC (Jurong Aromatics Corporation Pte. Ltd.)

▒ Sponsors / Project Company

19


▒ Project Site

20

▒ Major Stakeholders

supply

raw materials

SK Energy

BP, Glencore

Vitol

JAC (Project Company)

SKEI, Mitsui

BP, Vitol

Glencore, etc

Sponcers

JEC(60%), SKEI(10%)

Glencore(10%), Ikarus(10%)

EDBI(5%), SFX(5%)

offtake

loan

SKEI SK E&C

Sembawang

EPC O&M

KEXIM

commercial

banks

equity


21

Case II : Vietnam Nghi Son Refinery and Petrochemical Project

Construction of a refinery plant that transform the medium heavy petroleum (supplied by

Kuwait Oil Company) into gasoline and diesel. A petrochemical complex that produces

Benzene and Xylene etc.

▒ Purpose



▒ Project Cost

- Oil refining products : LPG(38k ton per year), gasoline(2,302k ton per year)

jet feul(592k ton per year), desel(3,669k ton per year)

- Petrochemical products : benzene(246k ton per year), paraxylene( 684k ton per year),

polypropylene( 372k ton per year)

▒ Main Product

- Sponsor : Petrovietnam(25.1%), Idemitsu(35.1%), KPE(35.1%) Mitsui(4.7%)

- Project company : Nghi Son Refinery and Petrochemical LLC (NSRP)


22

▒ Project Site


23



supply

raw materials

Kuwait Petroleum

Corporation

PIC

Marubeni

NSRP (Project Company)

Petrovietnam

Idemitsu,

Mutsui

Sponcers

Idemitsu Kosan (35.1%)

Kuwait Petroleum (35.1%)

Petrovietnam(25.1%)

Mitsui Chemicals (4.7%)

oil refining

products

BZ, PX

PP

loan

UOP, Axens,

Mitsui

Vietnam

Government

guarantee

incentives

Idemitsu, KPI,

Mitsui JGC consortium

EPC technical

support process

license

ECA,

Commercial banks

equity

24

Case III : Turkmenistan Petrochemical Complex Project (CF)

Construction of a Petrochemical plant that treat abundant Natural Gas of Turkmenistan into

Petrochemical Products such as PEPP.

▒ Purpose



▒ Project Cost

High-density polyethylene (386k per year), polypropylene(81k ton per year)

▒ Main Product

-Sponsor : Turkmenistan Government

- Project Company : Turkmengas (State owned company)


25

▒ Project Site


26



gas supply

Gazprom

Turkmegas (ordering

organization)

KEXIM,

K-sure,

commercial

banks

loan

Turkmenistan

government

security

(letter of comfort)

Escrow A/C

In DB

financial

support TVEB

security

payment

LG International

consortium

EPC

27

Case IV : Saudi Arabia Phosphate Mining and Fertilizer Complex Project

Construction of a phosphate processing plant to produce quality fertilizer. The Project aims at

improving social infrastructure and increasing employment through investment in non-oil

industry.

▒ Purpose



▒ Project Cost

- Diammonium phosphate(2900k ton per year), Ammonia(430k ton per year),

- Phosphoric acid(160k ton per year)

▒ Main Product

-Sponsor : Ma'aden(government equity 100%) : 70%, SABIC(government equity 70%) : 30%

- Project Company : Ma'aden Phosphate Company LLC (PhosCo)


28

▒ Project Site


29



supply

raw materials

AI jalamid mine

(phosphoric acid)

Aramco

(sulfur, natural gas)

Ma’aden

Phosphate

Company

SABIC

Ma’aden

Sponcers

Ma’aden (70%)

SABIC (30%)

offtake

loan

Samsung engeneering

Litwin

Hanwha E&C

EPC

KEXIM,

K-sure,

commercial

banks

equity

30

SECTION 4

Lessons to Learn

30

31

Lessons to Learn

▒ ECAs and MDBs as key players

▒ Lenders : Significant Due Diligence to analyze economic, legal, technical, market

▒ and other project-related risks

▒ Sponsors : motivated to complete the Project and present specific terms and conditions

▒ Government commitment – involve in early stage, diplomatic channel if needed

32

Thank you for your attention !

Kexim has evolved into a significant source of financing

in the market and its change is on going.

With Financial Advisory Department and active equity

investment program ahead, Kexim will continue to be a

Creative Leader in the Market.

Any inquiry is welcome, e-mail to [email protected]

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