President Park Geun-hye and her Peruvian counterpart, Ollanta Humala, vowed Monday to continue to cooperate in Peru's advanced trainer jet project, a move that could raise the prospects of a South Korean defense firm winning a lucrative deal.

The move "is designed to further expand mutual cooperation in high-tech aviation technology," Park said in a joint news conference with Humala after their summit in Peru, the second stop on her four-nation swing to South America.

The comments came as Korea Aerospace Industries Ltd., South Korea's sole aircraft manufacturer, is competing with foreign rivals to win a deal worth about $1 billion for Peru's next-generation light attack aircraft.

KAI has offered its FA-50 supersonic jets, a light attack variant of the T-50 Golden Eagle supersonic trainer that was developed with U.S. defense firm Lockheed Martin. It is the most-advanced variant of the T-50 family operated by the South Korean Air Force.

In 2012, KAI won a $210 million deal to provide Peru with 20 turbo-prop basic trainers called the KT-1P. KAI has built and delivered four trainers to Peru while it is helping the South American country assemble 16 others.

Park also said she and Humala agreed to make efforts to expand trade and investment between the two countries by taking advantage of their free trade pact that went into effect in 2011.

Trade volume between the two countries stood at $3.3 billion in 2013, up from $1.5 billion in 2007.

Also on Monday, South Korea and Peru signed 20 memorandums of understanding, which call for cooperation, among other things, in telemedicine, water management and a power grid.

Telemedicine is designed to improve access to quality care for those in medically deprived areas by using information technology, mostly the Internet.

Peru acknowledges the need to build information technology to improve medical services as the country has poor medical infrastructure and suffers from a doctor shortage, especially in remote areas.

Worldwide revenue for telehealth devices and services could increase to $4.5 billion in 2018, up tenfold from 2013, global information firm IHS Technology said last year on its website.

South Korea said an MOU calling for cooperation in water management at the Rimac River, a key source of potable water for Peruvians, could open up potential business opportunities to South Korea if Peru decides to develop infrastructure on the river.

South Korea also hopes that a separate MOU on power distribution and a smart grid could help it make inroads into Peru's electricity market and eventually expand Seoul's presence in Central and South America.

Peru plans to invest $3 billion by 2017 to strengthen its power grid as 17 percent of its electricity is lost in transmission and distribution, compared to 3 percent in South Korea.

"Bilateral cooperation could serve as a foundation of Peru's economic development," Park said in a separate meeting with hundreds of businessmen from the two countries.

Humala, who served as a military attache to South Korea in 2004, said that his country wants to embrace South Korea's economic development strategy for its own national development.

South Korea has become a global economic powerhouse, rising from the ashes of the 1950-53 Korean War.

"We can make achievements like South Korea has done if we work hard for national development," Humala said in the news conference.

Separately, Park met with the president of Congress and received the highest parliamentary award for her contribution to the development of bilateral relations. (Yonhap)