Shawdesh Desk:

Bangladesh and South Korea signed a loan agreement to provide $100 million in concessional loan from Economic Development Cooperation Fund (EDCF) to help economic recovery of Bangladesh hit by the pandemic.

EDCF is a Korea’s development financing program for assisting the socio-economic development of developing countries.

To this effect, an agreement was signed in Dhaka on Monday (Dec 20) by Md Shahriar Kader Siddiky, additional secretary of the Economic Relations Division (ERD) and Kim Tae soo, Executive Director of Export-Import Bank of Korea on behalf of their respective sides.

This amount will be disbursed within this month by the Korea Exim Bank, said the Korean Embassy in Dhaka on Tuesday (Dec 21).

The loan interest rate is 0.05% per annum and the maturity period is 40 years including a grace period of 15 years.

The Republic of Korea has already provided 50 million USD of EDCF loan as budgetary support in December 2020 to help Bangladesh’s efforts for fighting against the COVID-19 pandemic. It is the second provision of this type of concessional loan.

Also, it 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 the agreement, the Korean government will provide up to 700 million USD of 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.

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 US dollars through the EDCF.