Govt. to enter new accord with S. Korea to obtain US $ 500mn in development financing

The Cabinet of Ministers this week approved a proposal to enter into a new framework agreement with the government of South Korea, to obtain concessional loans up to US $ 500 million for the implementation of infrastructure projects recognised within the period of 2020-2022.

Prime Minister Mahinda Rajapaksa tabled the proposal in his capacity as the Finance Minister, on Monday.
“The Republic of Korea has agreed to supply Korean won not exceeding US $ 500 million for implementing projects recognised within the period of 2020-2022,” the Government Information Department said.

The Economic Development Cooperation Fund (EDCF) of the Exim Bank of Korea has been providing concessional loans to Sri Lanka since 1990s, as per the framework arrangements signed between the governments of the two countries.

The two governments in 2017 entered into a framework arrangement for the implementation of projects mutually agreed by both parties, up to US $ 500 million. However, the two-year framework arrangement expired in 2019.
The EDCF has successfully financed several key infrastructure projects, including the Ruhunupura Water Supply project, Improvement of Anuradhapura-Padeniya Road and Administrative Complex in Hambantota over the years.
Recently, Prime Minister Rajapaksa extended an invitation to South Korea’s Prime Minister Chung Sye-kyun to visit Sri Lanka after the COVID-19 situation is under control, which received a warm response from Prime Minister Chung.

He also sought Prime Minister Chung’s support to encourage South Korean investors to consider investing in Sri Lanka.

South Korea’s SK Group has expressed its interest to build the upcoming US $ 600 million LNG project in Sri Lanka on build-owned-operate-transfer (BOOT) basis.