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Korea to provide $700m for socio-economic dev

Dhaka, Seoul inked framework arrangement for 2021-25

  • Diplomatic Correspondent
  • 25 October, 2021 12:00 AM
  • Print news
Korea to provide $700m for socio-economic dev
ERD Secretary Fatima Yasmin and South Korean Ambassador to Dhaka LEE Jang-keun sign the framework arrangement on behalf of their respective governments at Economic Relations Division (ERD) in the capital on Sunday.

Bangladesh and South Korea signed a new framework arrangement on Sunday to arrange $700 million in loans from Korea’s Economic Development Cooperation Fund (EDCF) for Bangladesh from 2021 to 2025.

 Korean Ambassador to Bangladesh Lee Jang-keun and Secretary of the Economic Relations Division (ERD) Fatima Yasmin inked the deal in Dhaka.

 The framework arrangement will serve as a legal foundation for the Korean government’s provision of providing up to $700 million in concessional loans to Bangladesh for the next five years.

According to the arrangement, projects to be financed by the funds will be identified in close consultation between the two governments. The repayment period of the EDCF loans will be 40 years, including a 15-year grace period, with an annual interest rate between 0.01 per cent and 0.05 per cent.

 The arrangement also stipulates that all taxes, customs duties and other fiscal charges imposed in Bangladesh on goods and services related to the EDCF projects shall either be exempted or borne by the Bangladesh government.

Bangladesh is the second-largest recipient of EDCF loans worldwide in aggregate amount. So far, the Republic of Korea has funded 24 development projects in Bangladesh involving $1.2 billion through the EDCF.

 The amount of concessional loans to Bangladesh from Korea has been steadily increasing in recent years.

 The amount authorized in a renewed framework arrangement is up from the amount authorized in the previous EDCF Framework Arrangement 2017-2020 which stipulated a provision of $500 million in four years.

 “As a trusted development partner of Bangladesh, Korea will continue to support the socio-economic development of Bangladesh. The new EDCF Framework Arrangement signed today will provide additional momentum to further boost our economic and development cooperation,” said Ambassador Lee.

 “I hope this new framework arrangement provides meaningful resources in achieving SDGs in Bangladesh and for the country's smooth graduation from the LDCs by 2026,” he said.

 The framework arrangement will primarily concentrate on supporting several sectors such as enhancing health services and improving transportation in Bangladesh, reads a press statement of the Korean Embassy.