South Korea’s export credit agency has extended a US$1.3bn line of credit to Jordan’s Housing Bank for Trade and Finance (HBTF) in a deal the duo say will boost trade flows between the two countries.

The interbank credit facility, signed on June 22, will allow HBTF to lend to Jordanian companies importing from or doing other business with South Korean firms.

The Export-Import Bank of Korea (Kexim) says it is its first such arrangement with a bank in the region and is designed to help Korean exporters win market share in sectors such as automobiles, home appliances and construction projects in Jordan and its neighbours.

Korean corporate giants Hyundai and Samsung attended the signing ceremony in Amman, according to Kexim’s statement.

The agency’s chairman Bang Moon-kyu says the establishment of a credit line in Jordan was “inevitable” because the country is “a financial and logistics gateway in the Middle East, and we need to support Korean companies to overcome sluggish exports to the region and win infrastructure reconstruction projects in Iraq in the future”.

HBTF’s chief executive, Ammar Al-Safadi, says the “availability of quality financing options” will allow Jordanian importers to conduct more flexible transactions, “paving the path for the post-Covid economic recovery”.

“This agreement will have a far-reaching positive impact on trade relations between Jordan and Korea, allowing local businesses to conduct large-scale financial operations in an easy and efficient way,” Al-Safadi says.

“We are honoured that Kexim Bank chose Housing Bank to undertake this essential and large-scale project.”

South Korea’s exports to Jordan fell to US$469mn in 2020, the lowest figure since 2007, according to Comtrade data.

Korean exporters are also eyeing Jordan’s renewable energy ambitions. The government is aiming for renewables to make up almost a third of the country’s energy mix by the end of the decade.

While in Amman, Bang met Jordanian Prime Minister Bisher Hani Al-Khasawneh and energy and resources minister Hala Adel Zawati to express the bank’s “strong intention to provide financial support” for the renewables drive, the statement says. Korean solar battery manufacturer LG Chem was also represented at the signing ceremony.