SKorea approves US$ 100mn loan for Bangladesh’s economic recovery

South Korea has approved USD 100 million from the Economic Development Cooperation Fund (EDCF) to help Bangladesh's economy recover from the fallout of the coronavirus pandemic.

The EDCF is South Korea's development financing programme for assisting the socio-economic development of developing countries.

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This will be the first EDCF loan to be implemented under the new EDCF Framework Agreement for the years 2021 through 2025, which was signed between the two governments on October 24, 2021, according to a statement of the South Korean Embassy in Dhaka issued today.

The South Korean government provided USD 50 million loan as budgetary support to Bangladesh in December 2020 to help Bangladesh's efforts for fighting against the Covid-19 pandemic.

According to the agreement, the South Korean government is to provide up to USD 700 million of concessional loans to Bangladesh for the five-year period.

The new concessional loan of USD 100 million 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.

The amount would be released as soon as the loan agreement is signed between the Korea EXIM Bank and Bangladesh government which is expected to be done within this 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 USD 1.2 billion through the EDCF.