Governments of Bangladesh and the Republic of Korea signed an arrangement on 3rd December 2017, regarding the activities of the Economic Development Cooperation Fund (EDCF) in Bangladesh.
EDCF, established by the government of Korea in 1987, assists developing countries by financing infrastructure development for economic growth. EDCF operations are conducted by the Export Import Bank of Korea (Korea Eximbank) on behalf of the government of Korea.
The arrangement facilitates the establishment of a representative office of Korea Eximbank in Dhaka for EDCF operations to strengthen further the friendly relations existing between the two countries through the promotion of economic cooperation. Through representative offices in other countries such as Vietnam and Sri Lanka, EDCF has established a wide presence in the South and Southeast Asian region in particular.
EDCF has supported infrastructure development in Bangladesh since 1993 when the first loan was approved for a power distribution project. Since then, EDCF has provided loans to more than 20 projects in various economic sectors such as power, transport, water supply and information and communication technology (ICT). Total commitment to Bangladesh has now risen to over $1 billion, making Bangladesh the second largest EDCF recipient country.
The two governments are also in the process of formalising a Framework Arrangement that would enable the Bangladesh government to obtain EDCF loans of up to $500 million for the period of 2017-2020.
The amount will be used to finance several high-priority projects, such as the Construction of 2nd railway road cum bridge over Karnaphuli River and the Establishment of 160 Upazila ICT Training and Resource Centers for Education (UITRCE) Project Phase II.
The arrangement concerning EDCF activities was signed by Ahn Seong-Doo, Ambassador of Korea to Bangladesh, and Kazi Shofiqul Azam, Secretary of the Economic Relations Division (ERD) of the Ministry of Finance.
Ambassador Ahn acknowledged the long history of Korea-Bangladesh cooperation, highlighting the importance of Bangladesh towards Korea’s official development assistance (ODA).
He further hoped that the establishment of Korea Eximbank’s representative office will enhance EDCF operations and communication with the Bangladesh government.
Meanwhile, EDCF supports sustainable development of partner countries by providing concessional loans to establish the socio-economic infrastructure necessary for economic development. EDCF loans to Bangladesh generally carry a 0.01% interest with a 40 year repayment period, including a grace period of 15 years.
The purpose of Korean ODA is to share Korea’s own development experience over many years. Through instruments such as concessional EDCF loans, the Republic of Korea aims to support developing countries like Bangladesh by promoting the use of Korean expertise and technologies. Development cooperation thus enhances the prospect of increased economic cooperation, boosting trade and investment between the two countries.