South Korean banks investing heavily in Russia's Far East

Investment could reach US$2 billion.

A group of South Korean banking and industrial corporations, backed by the government, will invest the amount in various projects in the Russian Far East. About half of that money will be used to set up a special investment fund while the other half will finance the construction of a new coal terminal in the port of Vladivostok.

A Korean bank will partner with Russian state-owned financial institutions to set up the investment fund. The money will be used to finance various development projects in the Far East.

Sources said Russia is now drawing up a program to enable South Korean companies and capital to take part in the development of the Russian Far East and Siberia The fund will be used to support corporate investment projects in that area.

A Korean official said the exact size of the fund had yet to be determined, but he estimated it at some US$1 billion. In addition, Korea Development Bank and the Korea Western Power corporation intend to build a new coal terminal in the port of Vladivostok with a yearly capacity of 20 million tonnes.

The cost of the project in Vladivostok is estimated at US$1 billion. Partners in the project have already hired a consulting company to prepare technical documentation.