Government Agrees to Expand EDCF-IDB Cooperation Loan... Vice Minister Kim Yong-beom Requests Increase in South Korea's IDB Shareholding

[Sejong=Asia Economy Reporter Kim Hyunjung] The government has agreed to expand the cooperative loan project between the Economic Development Cooperation Fund (EDCF) and the Inter-American Development Bank (IDB) to support the economic development of developing countries. The loan limit has been supplemented to approximately $500 million, and support is now possible not only for projects promoted by recipient country governments but also for projects by private companies.

On the 19th, the Ministry of Economy and Finance announced that First Vice Minister Kim Yong-beom, IDB President Mauricio Claver-Carone, and James Scriven, President of IDB Invest, simultaneously signed a Letter of Intent (LoI) to renew the EDCF-IDB cooperative loan facility via a video conference held between Seoul and Barranquilla, Colombia.

The EDCF is a concessional aid fund established in 1987 to support the economic development of developing countries and promote economic cooperation with South Korea. The IDB is a multilateral development bank established in 1959 to support economic and social development and regional integration in Latin American and Caribbean countries. The EDCF-IDB cooperative loan facility refers to a cooperative system in which EDCF and IDB jointly identify promising cooperation projects (such as climate change, ICT) between Korea and Latin America, share project costs, and IDB manages project execution and bidding.

Through this LoI signing, the Ministry of Economy and Finance agreed with IDB to supplement the cooperative loan limit by $500 million for the facility expected to exhaust its limit before the contract period ends, and newly add IDB Invest as a cooperation target, enabling EDCF cooperative loan support for projects promoted by private companies in addition to those promoted by recipient country governments.

At the signing ceremony, Vice Minister Kim said, "I hope the EDCF-IDB cooperative loan facility can serve as a catalyst in the Latin American region, which is facing difficulties in infrastructure investment due to COVID-19," and President Claver-Carone responded, "The expansion of this cooperative loan facility will play an important role in the post-COVID-19 economic recovery of the Latin American region."

On the occasion of this signing ceremony, Vice Minister Kim and President Claver-Carone also discussed cooperation issues between Korea and the IDB. In particular, Vice Minister Kim requested President Claver-Carone to expand Korea’s shareholding to an appropriate level reflecting Korea’s external status during future IDB capital increase discussions (currently 0.004%, joint 47th among 48 member countries). After this LoI signing, the Ministry of Economy and Finance, IDB, and IDB Invest will conclude a final agreement specifying detailed cooperation methods such as procedures for discovering cooperative projects and information sharing methods through additional consultations.

This content was produced with the assistance of AI translation services.