The government is said to have decided to provide public financial support through the Korea Trade Insurance Corporation (K-sure) and the Export-Import Bank to back the second export contract for K2 tanks to Poland, which is approaching 9 trillion won. This is the largest single contract in history and the first major defense export since the inauguration of President Lee Jae-myung.
According to the industry on the 6th, the government is promoting financial support mobilizing public financial institutions for the second export contract of K2 tanks signed between Hyundai Rotem and the Ministry of National Defense of Poland. The Korea Trade Insurance Corporation (K-sure) and the Export-Import Bank (Exim) plan to participate in different ways such as guaranteeing and lending after consultations.
Hyundai Rotem announced on the 2nd (local time) that it has completed the signing of a second export contract for K2 tanks with Poland, worth approximately $6.5 billion (about 8.8 trillion won). A plan to finance about 80% of the total contract amount through policy financing is being discussed, with the support scale estimated to be around 7 trillion won.
This support is being coordinated so that the Korea Trade Insurance Corporation (K-sure) leads the loan guarantees, while the Export-Import Bank (Exim) complements by participating in the range of 20-30%. It considers the structural limits on Exim's additional capacity according to the Export-Import Bank Act's 'same borrower credit limit.' On the other hand, K-sure plays a leading role due to its relatively large funding capacity and the nature of guarantee methods, which face fewer credit provision restrictions.
The guarantee-centered financial support is a method of providing credit that allows the importing country to secure funds from external financial institutions at lower interest rates rather than directly lending funds from domestic institutions. The Polish government can stably secure funds from global banks thanks to Korea's public guarantees.
The government provided $10 billion in policy financing for the first export contract worth $12.4 billion (approximately 17 trillion won) in 2023. At that time, K-sure and Exim each contributed $5 billion. Large-scale defense contracts are characterized by government-to-government (G2G) agreements, and since the export amounts are significant, it is international practice for the exporting country to support policy financing and guarantees.
According to the industry, the second contract signed with Hyundai Rotem reportedly includes a condition that 'the contract will take effect if there is financial support at the government level.' Thus, government decisions are a prerequisite for executing the contract.
There is an interpretation that this decision reflects the new government's intention to strengthen the defense industry as a pillar of national industrial strategy. President Lee Jae-myung pledged during his presidential campaign to establish a 'defense export control tower' and to regularize 'defense export promotion strategy meetings presided over by the president.'