Korean businesses ready to invest in Ukraine: new tractor factory, EDCF loans, and priority sectors

Happy Vyshyvanka Day from the Advantage Ukraine team ??????

On this special day, we are delighted to share some exciting news from the Ukrainian delegation's visit to South Korea.

During a meeting with the Korean-Ukrainian Association of Trade and Industry, Ukraine successfully reached an agreement with TYM, a leading Korean agricultural machinery producer, to construct a new #tractor #manufacturing #plant in Ukraine. As a result, the parties are currently collaborating on a road map and action plan.

Previously, at the Asian Leadership Conference, a ceremony took place to sign a Preliminary Agreement between the Governments of Ukraine and the Republic of Korea concerning #loans from the Economic Development Cooperation Fund (#EDCF), a specialized division of the Korea Export-Import Bank (KEXIM).

"Ukraine is among the priority countries for bilateral cooperation with the Republic of Korea under the Official Development Assistance (#ODA) program. The possibility of receiving the first tranche, up to USD 300 million from the EDCF, will be available in 2023 within 3-4 months of signing the second stage of the agreement, which is expected in a month. The subsequent tranche of up to USD 3 billion will be accessible in 2024, with the limit gradually increasing to USD 8 billion as more projects are identified. Furthermore, Ukraine will have the opportunity to leverage Korean capacities and expertise for post-war reconstruction, including rebuilding infrastructure, industrial facilities, and civilian structures," stated Ukraine's Minister of Economy, Yuliia Svyrydenko.

Specifically, the funds will be acquired for an extended period with minimal interest rates: loan terms of up to 40 years at an annual interest rate of 0.15%, including a 10-year grace period for loan principal repayment. The Export-Import Bank of Korea, under the EDCF, will provide these loans.

Separate loan agreements will be established to secure financing for specific projects. The Korean Government may also provide grants and technical assistance for project preparation and evaluation. Additionally, plans are underway to establish an #EDCF #office in Ukraine.

The Ukrainian delegation proposed that Korean businesses explore opportunities for joint ventures across various sectors of the economy. Korean investors expressed interest in these prospects.

For instance, Lotte E&C and Hyundai Engineering demonstrated interest in collaboration for restoration projects and cooperation in the #fuel and #chemical industry. POSCO International was presented with Ukraine's potential for #green #metallurgy development. The company also operates a grain terminal in Ukraine, so discussions revolved around cooperation in the #agricultural sector, focusing on agricultural production and agro-processing. Furthermore, discussions covered cooperation possibilities in the extraction and processing of critical minerals like #lithium.

The Ukrainian delegation also submitted separate proposals for collaboration to several prominent Korean companies, including Hyundai E&C (a market leader in infrastructure, energy, industrial, and residential construction), Hyundai Motors (with the potential for #electric #vehicle production in Ukraine), SK Ecoplant (specializing in environmentally friendly technology implementation in industries), Samsung C&T (a leading South Korean construction company), and Hanwha Group (targeting full-cycle #solar #panel production, dual-use and defense products, and mobile unmanned #demining vehicles).

Yuliia Svyrydenko assured the South Korean business community that Ukraine currently offers the best opportunities for future business development. The country boasts a highly skilled workforce capable of tackling even the most challenging tasks. Furthermore, investors are provided with favorable conditions.

"We offer new companies entering the Ukrainian market solutions for locating their production facilities in #industrial #parks, and we also invite specialized companies to participate in the development of industrial parks in Ukraine as management entities. We have introduced state incentives, including import duty and #VAT exemptions on equipment imports for manufacturing companies," reassured Yuliia Svyrydenko to the Korean businessmen. Ukraine can meet its consumption needs due to its large domestic market and significant export potential.

"We have found common ground with our Korean partners and are already working on resolving organizational issues as promptly as possible to get quick results," summarized Ukraine's Minister of Economy.