The South Korean government has signed an agreement to provide $100m in concessional loans from the Economic Development Cooperation Fund (EDCF) to help Bangladesh recover from the effects of the pandemic. Monday (20 December) Additional Secretary of the Department of Economic Relations (ERD) Md. Shahriar Kader Siddiqui and Kim Te Su, Executive Director of the Export-Import Bank of Korea, signed the agreement on behalf of their respective sides. Money will be disbursed from Korea Exim Bank within this month.
EDCF is a Korean development financing program to support the socio-economic development of developing countries. The interest rate on annual loans is 0.05% and the maturity period is 40 years with a grace period of 15 years.
The Republic of Korea has already provided a US$ 50 million EDCF loan as budget support in December 2020 to support Bangladesh’s efforts to fight the COVID-19 pandemic. This is the second provision of such a concessional loan.
In addition, it will be the first EDCF loan to be implemented under the new EDCF Framework Agreement for the years 2021 to 2025, which was signed between the two governments on 24 October 2021.
According to the agreement, the Korean government will provide a concessional loan of US$ 700 million to the Bangladesh government for 5 years.
A new concessional loan of US$ 100 million will be used to implement several projects; mainly aimed at advancing the public finance management system and improving small and medium-sized businesses struggling with the pandemic.
Bangladesh is the second-largest recipient of EDCF loans worldwide. So far, the Republic of Korea has provided a total of US$ 1.2 billion for 24 development projects in Bangladesh through EDCF.
