South Korea to provide up to $ 700 million in soft loans between 2021 and 2025

The repayment period for EDCF loans will be 40 years, including a grace period of 15 years, with an annual interest rate of between 0.01% and 0.05%.

A new framework agreement on subsidized loans from the Economic Development Cooperation Fund (EDCF) was signed Sunday between South Korea and Bangladesh.

Ambassador Lee Jang-Keun of the Republic of Korea and Secretary Fatima Yasmin of the Economic Relations Division signed the framework agreement, which is expected to be paid between 2021 and 2025.

Ambassador Lee said, “As Bangladesh’s trusted development partner, South Korea will continue to support Bangladesh on its journey towards socio-economic development. The new EDCF framework agreement signed will provide additional impetus to further strengthen our economic and development cooperation. ”

“I hope that this new framework agreement will provide significant resources for the achievement of the SDGs by the government of Bangladesh and for a smooth exit of LDCs by 2026,” he added.

The EDCF framework agreement will serve as the legal basis for the South Korean government to grant up to $ 700 million in concessional loans to the government of Bangladesh over the next five years.

According to the arrangement, candidate projects will be identified for funding in close consultation between the two governments.

The repayment period for EDCF loans will be 40 years, including 15 years of grace period, with an annual interest rate of between 0.01% and 0.05%.

The agreement also mentions that all taxes, tariffs and other fiscal charges imposed in Bangladesh on goods and services related to EDCF projects will either be exempt or borne by the government of Bangladesh.

Bangladesh is the second largest beneficiary of EDCF loans worldwide. The Republic of Korea has so far funded 24 Bangladesh development projects totaling $ 1.2 billion through EDCF.

The amount of concessional loans granted to Bangladesh by South Korea has steadily increased in recent years.

The amount authorized in the renewed framework agreement is higher than the amount authorized in the previous EDCF 2017-2020 framework agreement, which provided for a provision of $ 500 million over four years.

A renewed framework agreement will mainly focus on supporting several sectors such as improving health services and improving transport in Bangladesh.

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