Poland takes a loan to pay for “Korean” contracts

The governments of Poland and South Korea have agreed on a loan to finance defense orders previously concluded by the Eastern European country.

The South Korean TV channel SBS (Seoul Broadcasting System) reported this.

The Polish government has taken out a 12 trillion Korean won ($9.2 billion) loan to purchase military equipment and weapons in the Republic of Korea and is currently negotiating further financial commitments on this matter.

The agreement was concluded at the beginning of a three-day visit to Korea by the Polish delegation led by Deputy Prime Minister and Minister of Defense Mariusz Błaszczak.

In total, the Korean government granted a loan to Poland through the Korea Eximbank (Export-Import Bank of Korea) in the amount of 70% of Warsaw’s total liabilities, i.e. the above-mentioned 12 trillion Korean won.

Defense contracts of Warsaw and Seoul

In the second half of 2022, the Ministry of Defense of Poland concluded a number of following contracts with Korean defense companies to purchase weapons.

On August 26, 2022, the Ministry of Defense of Poland signed a contract with Hyundai Rotem and Hanwha Defense to purchase K2 tanks and tracked K9 155mm self-propelled guns. Within the agreement, Poland is to receive 180 South Korean K2 Black Panther tanks worth $3.37 billion and 212 K9A1 Thunder self-propelled howitzers worth $2.4 billion.

On September 16, the Polish government concluded a contract to purchase 12 FA-50GF light combat aircraft worth $705 million and 36 FA-50PL worth $2.3 billion.

On November 4, an agreement was signed to supply 218 modules for the K239 Chunmoo multiple launch rocket system with ammunition worth $3.55 billion. Missile modules will be integrated by Polish enterprises on the chassis of a truck of their own production.

The total amount of concluded agreements is $12.325 billion, which is equal to 16.9 trillion won at the average exchange rate at that time.
The large-scale rearmament of the Polish military is taking place under the Polish government program to strengthen the capabilities of the armed forces and invest in military modernization with a budget of PLN 524 billion (almost €110 billion).

The plan is to spend a record amount for Poland, namely PLN 524 billion, to renew the military, which will be directed to modernize weapons and military equipment. Completion of the program goals is planned by 2035.