South Korea will provide $3 billion in soft loans to Bangladesh for implementing mega projects.
Bangladesh will receive the fund in instalments from 2023 to 2027, read a press release issued on Monday.
Secretary of the Economic Relations Division (ERD) Sharifa Khan and Deputy Minister for International Affairs, Ministry of Economy and Finance Seong-wook Kim signed a Letter of Understanding (LoU) in this regard on behalf of their respective countries.
At the same time, Additional Secretary (Asia, JEC and F&F) of the Economic Relations Division Md Shahriar Kader Siddiky and Executive Director of Korea Exim Bank Tae-soo Kim also signed the Cooperation Arrangement (C/A) on behalf of the respective countries.
The Korean government has been providing soft loans through the Economic Development Cooperation Fund (EDCF) for the development of socio-economic, infrastructure and JCT sectors in Bangladesh since 1993.
Already 16 projects worth $619.78 million have been completed with assistance from the EDCF and another seven projects worth $616.28 are currently ongoing.
Till now total commitment amount from the EDCF is $1.31 billion.
However, Korea will provide $3 billion as a soft loan through EDCF.
This is the second largest amount committed by the Korean government to its development partner countries.
The interest rate of the loan agreement of each project will be 1 per cent with 30 year repayment period including a seven-year grace period. Management fee would be 0.4 per cent and contractors will be appointed through international bidding.
