WARSAW, March 16 — South Korean commercial and private banks will create a fund that could provide US$7.5 billion to finance Polish purchases of weapons from Korea, a South Korean deputy defence minister told the defence24.pl website in an interview published yesterday.
Faced with Russia’s invasion of Ukraine, Warsaw has been ramping up defence spending and South Korea has emerged as a key supplier.
However, there had been concerns over the status of South Korean loans to finance the deals and over how a change of government in Warsaw could affect them.
“Korean commercial banks, private banks, have agreed to consolidate some form of funds, which will provide an additional US$7.5 billion (RM35 billion),” Sung Il was quoted as saying. “This is a very broad financing for the development of industrial and defence cooperation between our two countries.”
In February, South Korea’s parliament passed legislation to ease restrictions on import-export lending to support new defence sales, boosting the possible equity capital of the state-run Export-Import Bank of Korea to 25 trillion won (RM88.4 billion).
“We have put a lot of effort into increasing the capital of the Export-Import Bank of Korea,” Sung said. “Under the new law, we can grant Poland a loan of US$8.5 billion.”
The Polish defence ministry did not immediately respond to an emailed request for comment outside normal office hours. The South Korean defence ministry did not have an immediate comment.
Meanwhile, Polish Foreign Minister Radoslaw Sikorski told South Korean counterpart Cho Tae-yul during a phone call late yesterday that the new Polish government respects the previous administration’s defence contract and will continue to implement it, South Korea’s foreign ministry said in a statement.
In response, Cho mentioned South Korea’s recent legislation on import-export lending and said he hoped follow-up contracts with Poland would be signed shortly. — Reuters
