Korea to provide US$700m to Bangladesh as soft loan

Jago News Desk Published: 24 October 2021, 07:37 PM
Korea to provide US$700m to Bangladesh as soft loan

A "Framework Arrangement" was signed today between the governments of Bangladesh and Korea to provide soft loan of US$700.00 million for the period of 2021-2025.

The amount will be used as project assistance for various development schemes in Bangladesh.

Fatima Yasmin, secretary of Economic Relations Division (ERD) and LEE Jang-keun, ambassador of Republic of Korea in Bangladesh signed the "Framework Arrangement" on behalf of their respective governments. 

Officials from the Korean Embassy in Dhaka, the Kexim Bank and the ERD were present on the occasion, said a press release in Dhaka. 

The Korean Government has been providing soft loan through the Economic Development Cooperation Fund (EDCF) for the development of socio-economic, infrastructure and ICT sectors in Bangladesh since 1997.

Fifteen projects worth US$469.77 million have already been completed with assistance from the EDCF while another eight projects worth US$666.28 million are currently ongoing. 

At the end of FY 2020-21, the total commitment from the EDCF has been US$1330.48 million. This is the second largest amount committed by the Korean government for its development partners.

Under this Framework Arrangement, the Korean government will provide financial assistance to implement several projects in the next five years.

Loan agreements of US$100.00 million for "Sustainable Economic Recovery Programme (Subprogram1)" under Finance Division, US$ 51.00 million for "Procurement of CNG Single Decker AC Buses for BRTC" project under the Road Transport and Highways Division and US$25.00 million for "Establishment of a Modern International Training Institute for Dhaka WASA" project under the Local Government Division are expected to be signed within this year.

In addition, important projects like "Construction of Railway-cum-Road Bridges across the River Karnaphuli at Kalurghat, Chattogram" and "Establishment of a Multi-disciplinary and Super Specialized Hospital at BSMMU (2nd Phase)"are also expected to be implemented under this Framework Arrangement.

The loan agreements to be signed under this Framework Arrangement will bear interest rate of 0.01 per cent to 0.05 per cent with 40 years repayment period and 15 years grace period.

Source: BSS