Korea to give $700m loan for economic recovery, improving transportation
A “Framework Arrangement” was signed between the Bangladesh and Korean government on Sunday for the loans
Bangladesh will receive a $700 million soft loan from South Korea, 2021-2025, for sustainable economic recovery, improving transportation, and health services.
For the loans, on Sunday the Bangladesh government signed a "Framework Arrangement" with the Korean government to implement various development projects in the country, said a press release.
Under this Framework Arrangement, signed in the capital city's NEC Bhaban of the Economic Relations Division (ERD), the Korean government will provide financial assistance to implement various development projects in Bangladesh over the next five years.
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The governments are expected to sign loan agreements of $100 million for "Sustainable Economic Recovery Program (Subprogram1)" of the Finance Division, $51 million for
"Procurement of CNG Single Decker AC Buses for BRTC" project under the Road Transport and Highways Division, and $25 million for the "Establishment of a Modern International Training Institute for Dhaka WASA" project of the Local Government Division within this year.
Moreover, important projects like "Construction of Railway-cum-Road Bridges across the River Karnaphuli at the Kalurghat, Chattogram" and the "Establishment of a Multi-disciplinary and Super Specialized Hospital at Bangabandhu Sheikh Mujib Medical University (BSMMU) (2nd Phase)" are also expected to be implemented under this Framework Arrangement.
Fatima Yasmin, Secretary, Economic Relations Division of the Ministry of Finance, and LEE Jang-keun, Korean ambassador to Bangladesh, signed the arrangement on behalf of their respective governments.
The loan agreements to be signed under this Framework Arrangement will carry an interest rate of 0.01% to 0.05% with a 40-year term, including a 15- year grace period.
This is the second largest sum of money committed by the Korean government for its development partners.
The Korean government has been providing soft loans through the Economic Development Cooperation Fund (EDCF) of the Export-Import Bank of Korea (KEximbank) for the development of socio-economic, infrastructure and ICT sectors in Bangladesh since 1997.
Bangladesh has completed fifteen projects of $469.77 million with assistance from the EDCF. Another eight projects of $666.28 million are currently ongoing. At the end of Financial Year 2020-21, total commitment from the EDCF has been $1330.48 million.
Officials from the Korean Embassy in Dhaka, the KExim Bank, and the Economic Relations Division, were present at the occasion.
