South Korea ‘mobilizing banks’ to finance arms sale to Poland – Reuters
South Korea is seeking assistance from five domestic banks to help finance Poland’s purchase of $22 billion worth of weapons, after Warsaw hit import-export lending limits, in what would be Seoul’s biggest-ever arms sale, according to a report by Reuters.
“Five local banks are reviewing a syndicated loan as a support measure” intended to assist Warsaw’s purchase of military hardware from Seoul, Reuters said on Friday. This includes rocket artillery systems and fighter jets, the news agency added, citing a South Korean government official who spoke on condition of anonymity.
Officials from a South Korean defense manufacturer confirmed discussions of a syndicated loan plan, Reuters reported, while two representatives of South Korean banks confirmed that loans would be issued, but did not elaborate on what type.
A syndicated loan involves a group of lenders collaborating to provide a large sum to a single borrower, typically to finance significant deals. The South Korean defense official told Reuters that, should the syndicated loan prove to be insufficient, “there could be other financing measures on the way.”
The report indicates Seoul’s intentions to work around Poland’s financing obstacles to secure what would be South Korea’s largest-ever arms sale, worth around $22.7 billion. It follows an agreement struck between the two countries last year through which South Korean arms manufacturers arranged the supply of tanks, howitzers and fighter jets to the EU state.
That arrangement was worth about $13.7 billion and at the time was South Korea’s largest-ever arms export deal. Government officials in Seoul didn’t provide comment on the latest reported transaction when asked by Reuters.
The military conflict in Ukraine has provided a boom to South Korea’s weapons exporting industry, with sales totalling around $17 billion last year – a significant increase on the $7.25 billion it registered in 2021. Seoul’s 2022 deal with Poland established it as a major player in a global weapons export market typically dominated by the US and Russia.
Reuters also notes that the South Korean leadership is seeking closer relationships with Europe, and particularly with Poland, which borders Ukraine, as Warsaw beefs up its military stockpiles.
In September, Poland’s Prime Minister Mateusz Morawiecki suggested that it would no longer supply weapons to Ukraine amid a dispute regarding Kiev’s grain exports. Instead, Morawiecki outlined a plan for Warsaw to modernize its own military hardware.
He later clarified his comments, which he said had been misinterpreted in the “worst possible way,” by saying that it would be only newly-purchased weapons that would not be sent to its neighbor amid its conflict with Moscow.