Eximbank loses W35.6 bil. in overseas investments - Korea Times
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Eximbank loses W35.6 bil. in overseas investments

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Export-Import Bank of Korea (Eximbank) CEO Bang Moon-kyu speaks during a National Assembly audit of the state lender, Wednesday. Yonhap
Export-Import Bank of Korea (Eximbank) CEO Bang Moon-kyu speaks during a National Assembly audit of the state lender, Wednesday. Yonhap

CEO Bang vows to strengthen risk management

By Lee Kyung-min

The Export-Import Bank of Korea (Eximbank) has lost almost the entire investment of 35.6 billion won ($29.8 million) made with two local private equity funds (PEFs) during the 2008-13 Lee Myung-bak administration, a ruling party lawmaker said Wednesday.

Rep. Park Hong-keun of the Democratic Party of Korea (DPK) said data provided by Eximbank for the audit of the state lender by the National Assembly Strategy and Finance Committee showed two private equity funds ― Troika and Global Dynasty, set up in 2009 and 2010, respectively, as part of an energy diplomacy drive led by Lee ― reported net losses of 98.9 percent and 100 percent, respectively.

The government under the Lee administration revised a relevant law governing Eximbank and Lee made a presidential decree in 2009 for the state lender to invest in overseas resource development funds. An investment of 33.4 billion won was made with the Troika fund and 2.2 billion won with Global Dynasty funds.

"Lee Myung-bak government's investment resulted in the entire loss of investments. Eximbank as a state-run financial institution should improve its management to strengthen responsibility for losses in overseas investments. What is your assessment of this issue?" Park asked.

In response, Eximbank CEO Bang Moon-kyu said, "The oil prices hovered around $90 and exceed $100 at the time, so we rushed into the project. It is an investment failure, consequently. We will strengthen risk management."

Rep. Yong Hye-in of the minor opposition Basic Income Party on the finance committee criticized Eximbank for its lack of financial support for renewables, which the lawmaker said went against the carbon neutrality initiative spearheaded by Moon Jae-in administration.

The state lender invested 1.8 trillion won in coal-powered energy from 2017 to 2020, almost the same amount invested in solar power generation support. It invested 2.3 trillion won in renewable energy in the same period.

The state lender provided 564.2 billion won in financial support for the renewable energy encompassing solar, wind, waste resources and biomass in 2020, down 15 percent from 663.5 billion won in 2017.

"Eximbank failed to make renewable energy investments, a clear policy discord with the President's campaign pledges," she said. "The government announced that it will increase decarbonization efforts and expand renewable energy investment, but the amount invested in coal-powered energy and solar energy at a similar level is highly concerning and highlights the confusion and contradiction of the government policies."

The lawmaker said this is not the first time for the state lender to come under criticism for failing to promptly renounce coal-based energy policies.

"We have pointed out how the state lender's policies are contributing to the climate crisis at previous committee sessions. It should expand investments in renewable energy and set an example for the private sector to follow," she added.

Data provided by the lawmaker showed the government's facility investment in renewable energy on a steady rise since the 2010s.

About 60 percent of the world's new power generation facilities used renewable energy sources in 2017, but the figure rose to 75 percent in 2020, as cited by Korea Energy Economics Institute's paper International Renewable Energy Policy Changes and Market Analysis.

"The overall amount of financial support for renewable energy by the state-run financial institution is declining. This is highly worrisome, given the global wave of eco-friendly, sustainable policies," she said. Korea aims to reach net-zero carbon emissions by 2050.

Lee Kyung-min lkm@koreatimes.co.kr

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