Korea provides $ 290 m soft loan

A framework arrangement which will enable the Government to obtain a soft loan from the Korean Government of up to $290 m till 2015 was signed on December 31, 2012. This framework arrangement is based on the MoU which was signed between the two countries at the summit meeting during the state visit of President Mahinda Rajapaksa to Korea last April.

Under the arrangement, the two Governments are expected to work closely to develop a range of projects including construction of administrative complexes, renewable energy plants and infrastructure development.

The projects will be facilitated by the Korean Embassy and the Export and Import Bank of Korea.

The soft loan of the Government of Korea, which is referred to as the Economic Development Cooperation Fund (EDCF), was set up by the Government of Korea on June 1, 1987 to promote economic cooperation between Korea and developing countries and to share Korea’s own development experience.

The EDCF’s favourable financing terms include its comparatively low interest rate of 0.1 percent per annum and a lengthy repayment period of 40 years.