South Korea’s state-run Korea Development Bank (KDB) has provided record-high $1.7 billion project financing (PF) so far this year after it has actively sought PF chances overseas in hopes of gaining steady profits that could help it channel more funds to local companies.

According to investment bank industry sources on Thursday, the KDB has signed PF deals worth $1.7 billion in foreign countries as of October, and the value is expected to reach $2 billion by the end of this year. The bank provided mere $528 million won and $1.36 billion, respectively, in 2014 and 2015 in PF abroad.

KDB has been able to boost overseas PF by focusing remote regions such as Central and South Americas and Africa other than Southeast Asia where most Korean commercial banks have made inroads, an unnamed KDB official said, adding that the lender will bolster the projecting financing business as one of its core businesses.

KDB has been accelerating its efforts to promote its PF business overseas after the government scrapped a plan to privatize the bank.

Previous President Lee Myung-bak aimed to privatize the KDB in a move to trim the fiscal deficit by reducing stakes in assets including KDB and Industrial Bank. As part of KDB privatization process, the previous administration created the Korea Finance Corp., spinning it off from the KDB as the policy lender and leaving KDB with the roles of commercial lending, deposit taking and investment banking.

But the current Park Geun-hye administration decided to use policy banks to spur economic growth, aborting the plan and merging Korea Finance with KDB. Since Korea Finance was returned to KDB, it has been focusing more on the government-led restructuring of struggling local industries and companies, shifting away from its intended role.

To reinforce its PF business, the bank recently opened an office in international project financing hub New York, the U.S, dispatching officials at the International Finance Corp. and establishing a network with the Inter-American Bank.

By Hong Jang-won

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