Korean govt provides US $ 290 mn soft loan
A framework arrangement which will enable Sri Lanka to obtain a soft
loan from the Korean Government up to US $290 million till 2015, was
signed on December 31, 2012.
This framework arrangement is based on the MoU which was signed
between the two countries at the summit meeting during the state visit
of President Rajapaksa to Korea last April. Under the arrangement, the
two governments are expected to work closely to develop a range of
projects, including construction of administrative complexes, renewable
energy plants and infrastructure development.
The projects will be facilitated by the Korean Embassy and the Export
and Import Bank of Korea. The soft loan of the Government of Korea,
which is referred to as the Economic Development Cooperation Fund (EDCF),
was established by the Government of Korea on June 1, 1987, to promote
economic cooperation between Korea and developing countries and to share
Korea’s own development experience.
The EDCF’s favourable financing terms include its comparatively low
interest rate of 0.1% per annum and a lengthy repayment period of 40
years. At present, Sri Lanka is the fourth largest recipient of EDCF
with approximately US$ 0.5 billion of the fund spent on 23 national
projects from 1991 in the areas of water supply, irrigation, energy,
transport and establishing social safety networks.
These projects have been carefully selected through in-depth
assessment and multiple discussions to draw out Sri Lanka’s
developmental challenges and to reflect the country’s development needs.
Some of the most recent projects under EDCF include the
Padeniya-Anuradhapura road project, the solid waste disposal facilities
project, the establishment of Colombo Central Vocational Training
Centre, Gampaha College of Technology and the Ruhunupura water supply
Korea recently provided approximately US$ 70 million dollars to the
Sri Lankan Government in the form of grants under KOICA assistance and
loans (EDCF) to achieve balanced and sustainable development and to
assist social integration in line with its national development
With a recent agreement between the two countries on the Country
Partnership Strategy (CPS), both sides are expected to adopt strategic
approaches in the fields of economic infrastructure development,
education and training and governance.
Apart from financial assistance, Korea is closely involved in
knowledge sharing, people and cultural exchanges with Sri Lanka through
Korea International Cooperation Agency (KOICA), Korea Trade-Investment
Promotion Agency (KOTRA), Knowledge Sharing Programme (KSP), Korea
Project on International Agricultural (KOPIA) and HRD Korea.
For Example, more than 80 KOICA volunteers currently share their
expertise and knowledge with various government ministries, agencies and
institutes in the fields of medical service, education, culture, rural
development, agriculture vocational training, computer literacy,
environment and Korean language training under the World Friends Korea (WFK)
The Korean government expects to continue strengthening its ties with
Sri Lanka and assist Sri Lanka and its people towards achieving their
socio-economic growth targets in the future.