Korea has approved $3 billion as a soft loan to Bangladesh for improving daily lives of people by developing the transportation, health and education sector.
As part of its move, a “Framework Arrangement” was signed on Thursday between the Government of the People’s Republic of Bangladesh and the Government of the Republic of Korea to provide a $3 billion soft loan during the period 2023-2027.
The amount will be used as project assistance at various development projects in Bangladesh to be undertaken during that period.
Interest rate of the loan agreements to be signed under this Framework Arrangement will be 0.01 percent to 0.05 percent with 40 years repayment period and 15 years grace period.
However, in the case of the programme, interest rate will be 1 percent with 25 years repayment period and 07 years grace period.
On the same day MoU on Dhaka Mass Rapid Transit Development Project (Line-4) Project was signed between Bangladesh and Korea.
DMTCL under Road Transport and Highways Division will implement this project through EDCF-EDPF co-financing.
Besides, Loan Agreement of Replacement and Modernization of Signaling and Interlocking System of Stations of Ishurdi-Parbatipur Section in West Zone of Bangladesh Railway” project amounting $61 million to be implemented by Bangladesh Railway under Ministry of Railways, and another Loan Agreement of “Procurement of CNG Single Decker AC Buses for BRTC” project amounting $77.44 million to be implemented by BRTC under Road Transport and Highways Division were also signed on the same day.
Interest rate of these loans is 0.01 percent and repayment period is 40.5 years (including 15.5 year grace period).
Sharifa Khan, Secretary, Economic Relations Division and Kisun BANG, 1st Vice Minister of Economy and Finance, Republic of Korea signed the Framework Arrangement and the MoU on Dhaka Mass Rapid Transit Development Project (Line-4) project on behalf of their respective governments.
Md Shahriar Kader Siddiky, Additional Secretary, Economic Relations Division and Hee-Sung YOON, Chairman and President of Korea EximBank signed the above-mentioned two Loan Agreements on behalf of their respective governments.
The Korean Government has been providing soft loans through the Economic Development Cooperation Fund (EDCF) for the development of socio-economic, infrastructure and ICT sectors in Bangladesh since 1993.
17 projects worth $664.77 million have been completed with assistance from the EDCF and another 7 projects worth $616.28 are currently ongoing.
As of now total commitment from the EDCF has been $1449.03 million. This is the second largest amount committed by the Korean Government for its development partners.
