Monday, 10 May 2021 19:47

South Korea agrees to provide US$ 500 million soft loan to Sri Lanka Featured

South Korea will be providing a soft loan facility of US$ 500 million in accordance with the agreement signed between the Finance Ministry and the Eximbank of Korea.

In order to further strengthen the economic cooperation between two countries, the Government of Republic of Korea has agreed to provide concessional loans from the Economic Development Cooperation Fund (EDCF) of the Export Import Bank of Korea (KEximbank,) Finace Ministry announced a short while ago. .

Accordingly, the Governments South Korea and Sri Lanka have agreed to sign a new Framework Arrangement for the period of 2020-2022 to obtain loans through EDCF up to an aggregate commitment amount of US$ 500 million to finance projects mutually agreed

The loan interest rate on this concessional loan is about as low as 0.15% -0.20% and the loan has a repayment period of about 40 years with a grace period of 10 years.

In addition, the two sides agreed to continue the Korean Exim Bank Representative Office, which was opened in Colombo in January 2016 by its Chairman, to further implement the projects in a well-coordinated manner.

The Framework Arrangement was signed today (on May 10, 2021) by. S R Attygalle, Secretary, Ministry of Finance on behalf of the Government of Sri Lanka, and Mr. Woonjin Jeong,the Ambassador of the Republic of Korea, representing the Republic of Korea.

The Cabinet has approved the proposal to obtain US$ 500 million (Rs. 950 million) debt from South Korea, for the purpose of undertaking future projects in Sri Lanka.

The framework agreement signed between the two countries in 2017 and renewed in December 2019 in an agreement where South Korea has increased its soft loan commitment to Sri Lanka from US$ 300 million to US$ 500 million.

The agreement was signed during Former President Maithripala Sirisena’s visit to South Korea.

A statement issued by the Korean embassy at that time has stated that the funds will be Official Development Assistance (ODA) from EDCF (Economic Development Cooperation Fund) entrusted with Korea Eximbank.

 

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