Korea to provide $100 million loan for post-Covid recovery

The South Korean government has recently approved a concessional loan of $100 million from the Economic Development Cooperation Fund (EDCF) to the Bangladesh government to help the recovery of Bangladesh's economy hit by the corona pandemic.

Earlier, in December 2020, Korea provided $50 million loan as budgetary support to Bangladesh from the EDCG, which is Korea's development financing program for assisting the socio-economic development of developing countries.

The latest approval of $100 million loan is the second provision of this type of concessional loan and also the first EDCF loan to be implemented under the new EDCF Framework Agreement for the years 2021 through 2025 that was signed between the two Governments on 24 October 2021.

According to the Agreement, the Korean government will provide up to $700 million as concessional loans to the government of Bangladesh for the five-year period.

The new concessional loan of 100 million US dollars will be used to implement several projects aimed at advancing public finance management system and improving small and medium-sized businesses struggling from the repercussion of the pandemic, read a press statement.

The amount would be released as soon as the Loan Agreement is signed between the Korea EXIM Bank and the Bangladesh Government which is expected to be done within the year.

Bangladesh is the second largest recipient of the EDCF loans worldwide in aggregate amount. So far, the Republic of Korea has funded 24 development projects of Bangladesh with total amount of $1.2 billion through the EDCF, added the statement.