Korean media: Poland finances weapons purchases in Korea with Korean loans

A worker stands next to South Korean K2 Black Panther tanks in in the Polish Navy port of Gdynia, Poland, Tuesday, Dec. 6, 2022. (AP Photo/Michal Dyjuk)
By Grzegorz Adamczyk
3 Min Read

Poland has taken out loans to purchase weapons in the Republic of Korea worth nearly €8.8 billion and will soon make purchases worth double that amount, according to a report from South Korean television SBS made during a visit by Defense Minister Mariusz Błaszczak to Seoul.

Poland borrowed €8.5 billion from the Republic of Korea, so double that amount would be €17 billion, calculates the Defence24.pl military news portal. Meanwhile, the previous Polish purchases had a similar value, which involved K239 Chunmoo rocket artillery launchers, costing €4.6 billion for 218 units, along with 48 FA-50 aircraft costing €2.9 billion, K9 Thunder howitzers costing €2.9 billion for 212 units, and 180 units of K2 tanks costing €4.4 billion.

The total cost of the previous purchases rose to €15 billion, and the previous loan covered over half of that amount, estimates Defence24.pl.

This is consistent with the official report presented in the Korean parliament, which indicated the Korean government provided a loan to the Polish authorities through the Korea Eximbank, and this loan was valued at 70 percent of the value of Polish orders.

Another loan announcement likely means more orders, potentially including additional K2 Black Panther tanks and K9 howitzers. The intended use of the additional funds remains uncertain, but possibilities include obtaining a license for K2 tanks, establishing local production facilities, and transferring other technologies.

Although the Polish authorities have not yet commented on the information provided by Korean media, it is worth emphasizing that the source of funding for major arms purchases has been presented completely differently in Poland so far.

Arms purchases were supposed to be financed through an increase in defense spending as a percentage of GDP, which currently stands at 2.2 percent of GDP and is set to reach 2.5 percent of GDP by 2026. Financing was also to come from the establishment of the Armed Forces Support Fund, funded by profits from the National Bank of Poland and securities covered by state guarantees.

According to the Wp.pl portal, the information provided by Korean media further complicates the situation. Although financing arms purchases through loans granted by the weapons manufacturer is not uncommon, the Polish version shows a lack of transparency and clear communication from the authorities regarding the sources of funding for the accelerated reform of Poland’s armed forces.

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