Loan from Korea to Finance $22bn Polish Defence Procurement?

Strzelanie z wyrzutni K239 Chunmoo
Photo. Hanwha

Reuters stated that South Korea announced an intent to finance Polish defence procurement for 22 bn dollars. Seoul is in talks with local banks, regarding a syndicated loan.

Once the statutory limits have been reached, regarding international trade loans, the South Korean government is getting the local banks involved, to allow Poland to procure arms valued at USD 22 bn., Reuters reports, quoting five persons involved in the matter. Talks are underway, on a coordinated loan support scheme. The banks« support is to allow for procurement of rocket artillery systems and fighter aircraft which may contribute to further reinforcement of defence cooperation between these two states.

”Five local banks are reviewing a syndicated loan as a support measure” to help Poland finance its purchase of South Korean rocket artillery systems and fighter jets” South Korean government official said, speaking on condition of anonymity to discuss ongoing planning.

The loan plans have also been confirmed by two anonymous representatives of a Korean defence industry business, and two banking industry representatives, who did not, however, specify the amounts involved. Representatives of the defence sector from South Korea note that, should the loan be insufficient, it would be possible to seek other forms of financing. That shows Seoul’s determination to secure and support the potential contract. The negotiation is hence underway, not just between Poland and South Korea, but also internally, within the South Korean banking sector. There is a necessity to increase the loan limits - required to finance the Polish procurement.

The increased Korean export levels (up to USD 17 bn. last year), somewhat reflect the growing dynamics and opportunities emerging for the South Korean defence industry, as the war in Ukraine wages on. Despite the lack of official statements made by Hyundai Rotem or Hanwha Aerospace and the lack of direct response by the South Korean government, the interest seems to grow and to be headed towards long-term cooperation.