Ukraine and South Korea sign preliminary agreement on securing a concessional loan of $8 billion from EDCF
It is expected that Ukraine will receive the first tranche of up to $300 million within 3-4 months of signing the final agreement, with another $3 billion in 2024
An intergovernmental preliminary agreement regarding loans from the Economic Development Cooperation Fund (EDCF), a special division of the Korean Export-Import Bank, has been signed between Ukraine and South Korea.
This is reported by the Ministry of Economy.
It is noted that the document was signed within the framework of the Asian Leadership conference during the visit of the Ukrainian delegation to the Republic of Korea. Ukraine was represented at the ceremony by First Deputy Prime Minister Yulia Svyrydenko.
In her words, "the opportunity to receive the first tranche from EDCF of up to $300 million will arise in 2023 within 3-4 months from the moment of signing the second stage of the agreement, which is expected a month from today's extremely important event."
She explaines that the next tranche of up to $3 billion will become available in 2024, with a gradual increase in the limit to $8 billion. According to her, Ukraine will have the opportunity to use Korean resources and expertise to restore damaged infrastructure, industrial enterprises and civilian objects after the war.
As the Ministry of Economy points out, the funds will be raised for a long term at minimal interest rates: the loan term is up to 40 years at 0.15% per annum with a deferral of the principal repayment for 10 years. Loans will be provided by the Korean Export-Import Bank within the EDCF fund.
It is reported that separate loan agreements will be concluded to finance specific projects. For its part, the Government of Korea can provide grants and technical assistance for the preparation and evaluation of these projects.
In addition, the opening of an EDCF office in Ukraine is planned.
Reference. The Economic Development and Cooperation Fund (EDCF) was established by the Government of the Republic of Korea on June 1, 1987, with the aim of promoting economic cooperation with developing countries. It provides financial support for industrial development and economic stability of partner countries.
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