Deal for $3b S Korean concessional loan signed

South Korea and Bangladesh signed a new Framework Arrangement on Thursday that will bring an impressive US$ 3 billion worth of concessional loans from the Economic Development Cooperation Fund (EDCF) during five years from 2023 through 2027.
The signing ceremony took place during the 56th annual general meeting of the Board of Governors of the Asian Development Bank (ADB) in Incheon, Korea.
Additionally, a memorandum of understanding (MoU) for cooperation on the Dhaka MRT Line-4 connecting Dhaka to Madanpur in Narayanganj via Signboard, and an EDCF loan agreement for two other projects — the procurement of CNG buses and the modernisation of the railway signalling system — were signed.
Kisun Bang, 1st Vice Minister for Economy and Finance, and Sharifa Khan, Secretary of the Economic Relations Division (ERD), signed the agreement on behalf of their respective sides, according to a spokesperson for the Korean Embassy in Dhaka.
The EDCF agreement serves as the legal foundation for the Korean government’s provision of up to US$ 3 billion in concessional lending to Bangladesh for the next five years.
The EDCF loans will have a repayment period of 40 years, including a 15-year grace period, with an annual interest rate ranging from 0.01 per cent to 0.05 per cent, as per the agreement.
In the future, candidate projects will be identified in close consultation between the two governments, as outlined in the agreement.
South Korean Ambassador to Bangladesh Lee Jang-kuen said, “It is particularly meaningful to sign a new EDCF Framework Arrangement in the year of the 50th anniversary of diplomatic ties between the two countries.”
The substantial increase in concessional loans to Bangladesh is expected to enable Korea to support mega projects in Bangladesh, also contributing to the country’s socio-economic development.
“I hope this US$ 3 billion support serves as a catalyst for improving the daily lives of Bangladesh’s people, such as in the areas of transportation, health, and education, and for enhancing the friendship between the people of Bangladesh and Korea,” he said.
Bangladesh has become the second-largest recipient of Korea’s Official Development Aid (ODA) globally with the signing of the new framework arrangement.
The newly authorised amount is over four times that of the previous EDCF Framework Arrangement, which stipulated the provision of up to US$ 700 million for the years 2021 through 2025.
South Korea established the Economic Development Cooperation Fund (EDCF) on June 1, 1987, with the purpose of promoting economic cooperation between Korea and developing countries. So far, the Korean government has supported 30 development projects in Bangladesh with an aggregate amount of US$ 1.7 billion through the fund.
According to the spokesperson, the Government of the Republic of Korea has made a bold decision to increase assistance considerably due to its amicable relations with Bangladesh and the bright future of the country.

mirmostafiz@yahoo.com