By Jhoo Dong-chan
Vietnam was the largest recipient of funding from the Economic Development Cooperation Fund (EDCF) provided by the Export-Import Bank of Korea (Korea Eximbank) over the past five years, the bank said Sunday.
Established in June 1987, the EDCF has promoted economic cooperation between Korea and emerging economies. It assists partner countries by providing funding for their industrial development and economic stability.
The Korea Eximbank said the state-run bank provided 5.73 trillion won ($4.8 billion) through the EDCF in Asia over the past five years. It invested 1.07 trillion won in the region in 2017 and 913 billion won last year.
Of the recipient countries, Vietnam received 1.09 trillion won over the past five years, the highest on the list followed by Myanmar with 867.2 billion won and Bangladesh, 828.2 billion won.
Vietnam gets over W1 tril. in financial aid from Korea
“Reflecting the country’s rapid economic growth rate, Vietnam has been the world’s most active player in establishing its industrial infrastructure,” said a Korea Eximbank official.
“It is carrying out a number of infrastructure projects, building roads and railways. Korea Eximbank has financed the country’s projects via the fund.”
Of its entire EDCF financing projects across the world, Korea Eximbank invested 3.87 trillion won in emerging economies’ road and rail projects and 1.13 trillion won on those related to water resources and sanitary facilities over the past five years.
By financing categorizations, most emerging economies got the EDCF investment through project loans.
A project loan is the funding of long-term infrastructure or industrial projects and public services financed by a government or corporate body. The debt and equity used to finance the project are paid back from the cash flow generated by it.
Of the Korea Eximbank’s 138 EDCF cases over the past five years, 106 cases, or 76 percent, were project loans worth 7.91 trillion won.
The Korea Eximbank said it will expand its EDCF investment in Southeast Asian countries in line with the Moon Jae-in administration’s New Southern Policy.
“The Korea Eximbank aims to expand EDCF investment in Asia ― up to 60 percent of its entire fund by 2022,” said Korea Eximbank Chairman Eun Sung-soo during a press conference in January.
This article was first posted on Korea Times