[2025 Audit] Advance Payments Decrease Due to Large-Scale Project Orders, SMEs Suffer... Export-Import Bank Vows to Minimize Impact

The Export-Import Bank of Korea has stated, in response to criticism that the Economic Development Cooperation Fund (EDCF) has become insufficient due to large-scale project orders from major corporations-resulting in reduced advance payments for small and medium-sized enterprises and subsequent damages-that it will do its utmost to prevent any negative impact from spreading to subcontractors.

On October 27, Acting President of the Export-Import Bank Ahn Jonghyuk made this statement during a National Assembly Strategy and Finance Committee audit, after Assemblyman Kim Youngjin of the Democratic Party of Korea pointed out that the support provided to Hyundai Rotem's automotive project in Morocco was nearly equivalent to the entire EDCF budget for the year, leading to adjustments in advance payments for other projects.

Assemblyman Kim asked, "With loans to Africa and others being reduced, the advance payments have also decreased. Isn't it problematic if these advance payments are not executed?" Acting President Ahn responded, "The rates for advance payments are determined by contracts between the ordering party and the business operator, so the Export-Import Bank cannot intervene."

Assemblyman Kim then stated, "As advance payments decrease, subcontractors who secure financing from financial institutions are facing significant difficulties due to the reduction in advance payments. Can this simply be dismissed as an issue between the recipient country and the relevant country?" Acting President Ahn replied, "We requested more detailed information from the complainant, but since no further information was provided, there was no way to address the complaint." He added, "Although we do not have legal authority to adjust advance payments, as a lending country, we will do our best to prevent any negative impact from spreading to subcontractors, as you are concerned, by informally conveying our intentions or exerting influence on the recipient country or other business operators."