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Korea VS Paraguay

Global SymposiumKorea S.O.C Case

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Index

3Paraguay

□ Based on Korea’s experiences of economic development and pro-

fessional knowledge, help S.O.C development in Paraguay

□ To achieve the goal, Introduce initial stage of S.O.C development

case of Korea

□ Study recent successful S.O.C cases to arrange concrete plans

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□ Establish Investment Plans and Feasibility Review

• Conclude MOU with local partners

• Consult investment sourcing

• Constitute investment review advisory (Bureaucrat, Public

enterprises, Bank, Law office, Professional investment institutions)

• Identify law and institutional investment barriers and examine solutions

• Large-scale S.O.C development or small-scale pilot project

investment review

Paraguay

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□ If required rate of return is lower than economic feasibility, the

government or international organizations should assure Mini-

mum Revenue Guarantee(MRG)

□ Need credit enhancement from organizations which have

credit ratings over investable grade (above BBB+)

Paraguay

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□ Seal Investment Contract

□ Funding Strategy

→ Equity – Paraguay government & Korean in-vestors → Loan – Loan capital from Korea or Paraguay

Paraguay

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□ Management of Investment Asset

• Development : Managing S.O.C development

construction, quality control, safety supervision

• Management : Maintenance, collecting fees, and

distribution of profits

• Withdrawal of the principle : To Be Determined

Paraguay

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Division 1968 2013GDP Appx. $5.95billion $1,304billion

Road Extension Length 35,000km (6.5% paved)106,000km (82%

paved)*During Construction, it was a big national project taking up 23.6% of national budget. (per capita income=$142)

□ SOC Development Case Presentation

1. Gyeongbu Expressway

• Length : 425Km (Seoul to Busan)

• Period : 1968.2~1970.7 (2 years and 5 months)

• Expense : Appx. $136million

• Effect : Connecting the 1st city and 2nd city of Korea by the expressway to boost economic vitality and growth

Paraguay

9Paraguay

□ Private Investment Case Presentation

2. Incheon Road Bridge

• Length : 21.4km (Bridge: 18.4km)

• Period : 2005.7 ~ 2009.10 (52 months)

• Methods : Private investment- Marine bridge (12.3km)

National investment- Connecting road between Songdo

international business district and Yeongjongdo island (9.1km)

• Note : The longest bridge in Korea, the 1st Foreign pri-vate

investment of S.O.C

• Expense : $2.38billion

10Paraguay

□ Private Investment Case Presentation

2. Incheon Road Bridge – Project Route Map

Yeongjongdo island

Songdo Interna-tional Business Dis-

trict

11Paraguay

□ Private Investment Case Presentation

2. Incheon Road Bridge – Financing

Gov-ern-mentPrivate

$0.86bn

$1.52bn

Construction Expenses: $2.38billion

Private Capital $0.77bn

Government Sub-sidy $0.75bn

51%

49%

12Paraguay

□ Private Investment Case Presentation

3. Incheon Airport Railroad

• Length : 61km

• Period : 1st stage- 2001~2007, 2nd stage: 2004~2011

• Facilities : Incheon International Airport ~ Seoul Station

(10 stations, 1 city airport)

• Expenses : $4.5billion

*Private investment- Investors fund owned capital and the

government aids subsidy and assures Minimum Revenue

Guarantee

13Paraguay

□ Private Investment Case Presentation

3. Incheon Airport Railroad – Project route map

Seoul

Incheon

14Paraguay

□ Private Investment Case Presentation

3. Incheon Airport Railroad – Financing

$0.93bn

$0.84bn$2.58bn

$0.19bnOwned Capital

Govenment Subsidy

Borrowed Capital

1st Traffic Receipts

Construction Expenses: $4.54billion

(21%)

(19%)

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Thank you