CABEI and Korea strengthen regional development and integration
14.01.2019 00:00 By: CABEI News Age: 335 days
The incorporation of the Republic of South Korea to CABEI will reinforce its financial profile, making it the best credit rating risk in Latin America. CABEI, which is a regional leader in development banking, will substantially strengthen its capacity to grant additional loans to the region.
Tegucigalpa, January 14, 2019.- With the recent signing of the adhesion document, the Central American Bank for Economic Integration (CABEI) has taken another important step in the process of incorporating the Republic of South Korea as a non-regional member.
Subsequent to making its first payment, which represents 25 percent of the total subscription contribution amounting to US$450 million, the Asian country will become a new member and one of the non-regional members with greater shareholding within the institution; South Korea will be the second Asian country to become a CABEI member.
As a relevant and historical result for the Bank, the incorporation of Korea will further strengthen its financial profile given the high credit rating of that country, as well as reinforce institutional governance and foster the benefits of the Central American Free Trade Agreement, whose negotiations had the financial support of the Bank.
In this regard, CABEI Executive President, Dr. Dante Mossi, explained that, "This incorporation is essential to continue consolidating the Bank's financial soundness, investing in projects with an impact on development and strengthening the competitive position of the countries in the world economy.
"The capitalization will generate the following direct benefits:
• Injection of additional capital into CABEI, substantially improving its financial position and its capacity to grant more loans to the region.
• The credit profile of Korea and its country rating will allow improving the rating of CABEI and the confidence of foreign investments in the Bank, seeking to have a significant impact on the Bank in order to attract resources in international markets.
• Benefits for CABEI with the transfer of technical knowledge and technologies from Korea. The incorporation is expected to provide investment opportunities in regional integration projects, mainly physical interconnection projects, such as highways, ports and airports, as well as commercial facilitation through the modernization of border posts and improved electrical interconnection of the Central American Electrical Interconnection and Telecommunications System.
The incorporation of Korea to CABEI will also expand economic cooperation with the SICA countries through a promotion plan in sectors such as commerce, energy, environment and infrastructure; improve the schemes of Public-Private Partnerships in conjunction with Korean private companies; and promote new co-financing opportunities in local and regional projects.