Sri Lanka to get US$300mn in Korean loans
ECONOMYNEXT – South Korea will provide Sri Lanka up to US$300 million in soft loans till 2018 under an agreement signed between the two governments Thursday focusing on industrial development and economic stability.
Under the arrangement, the two governments expect to work closely to develop a diverse range of projects in such sectors as transportation, education, water treatment, and rural development, the Korean embassy said in a statement.
These projects have been identified as priority areas under the Country Partnership Strategy between Korea and Sri Lanka.
The loans will be given under an agreement between the two governments signed in December 1995 for funds from Korea’s Economic Development Cooperation Fund (EDCF).
The EDCF was established in 1987 with the purpose of promoting economic cooperation between Korea and partner countries.
“Drawing on Korea’s own development experience over the years, the EDCF assists partner countries in their industrial development and economic stability through the provision of long-term, low-interest credit,” the statement said.
Korea Eximbank manages the fund and has provided Sri Lanka with loans worth U$ 606 million for 27 projects since 1990.
Sri Lanka is the fifth largest recipient of EDCF, and a significant portfolio lies in the water supply and transportation sectors besides projects in other sectors such as ICT, education and skills development, public administration, and waste management.
The statement said Ruhunupura water supply, Hatton~Nuwara Eliya road rehabilitation, Hambantota administrative complex, and E-governance system are some recently completed projects that are being successfully operated.
The ongoing projects include solid waste disposal facilities, Colombo vocational training center and Gampaha technical college, Deduruoya and Ruwanwella water supply projects.
In addition to EDCF support, Korea Eximbank, as a trade facilitator of the Korean government, plans to provide competitive financing for infrastructure projects and FDI projects in Sri Lanka from its own account, the statement said.
Accumulated South Korean trade finance and FDI finance have reached U$314 million and U$ 64 million since 1978.
(COLOMBO, July 13, 2016)