South Korea's US$200 Billion U.S. Program: What Sponsors Must Know

Key Takeaways

• Project selection does not itself establish an enforceable funding commitment. Participants should identify the approvals, executed instruments and outstanding conditions supporting each South Korean tranche before relying on it.
• The US$20 billion annual limit applies across the program. Each project should assess whether its proposed allocation and funding schedule meet its development and construction requirements.
• South Korea's commercial-reasonableness test requires attention to the cash expected to reach South Korea. Changes to debt, reserves, fees or distributions should be tested against both that requirement and the project’s financing needs.
• Private participants should establish the permitted form of their participation, the entity responsible for payment and the assets or credit support available to meet its obligations.