Bangladesh, Korea sign $3bn soft loan deal for mega projects
Bangladesh and Korea on Sunday signed a soft loan agreement worth $3 billion aimed at implementing new mega projects in the country.
Under the signed Letter of Understanding (LoU) and Cooperation Arrangement (C/A), Korea will provide the loan through the Economic Development Cooperation Fund (EDCF) during 2023-2027, according to a press release of the Ministry of Finance on Monday.
The LoU was signed by Sharifa Khan, secretary of the Economic Relations Division (ERD) and Seong-wook Kim, deputy minister for international affairs at the Korean Ministry of Economy and Finance, on behalf of the respective countries.
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At the same time, the cooperation arrangement was signed by Md Shahriar Kader Siddiky, additional secretary of the ERD and Tae-soo Kim, executive director of Korea Exim Bank, said the release.
The interest rate of the soft loan agreement will be 1% with a 30-year repayment period, including a 7-year grace period. The management fee would be 0.4% and contractors will be appointed through international bidding, it added.
Korea has been providing soft loans through the EDCF for the development of socio-economic, infrastructure and ICT sectors in Bangladesh since 1993.
So far, 16 projects worth $619.78 million have been completed with Korea's assistance from the EDCF and seven more worth $616.28 are currently ongoing.
Until now, the total commitment amount from the EDCF for Bangladesh is $1.31 billion, which is the second largest amount committed by Korea for its development partner countries.
