South Korea to provide Ukraine with $8bn loan on ‘extremely favourable terms’

Ukraine and South Korea have reached a preliminary agreement on a loan of up to USD 8 billion on "extremely favourable terms" during the Ukrainian delegation’s visit to Seoul, the economy ministry said in a statement.

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The money will be provided by the Export-Import Bank of Korea under the Economic Development and Cooperation Fund (EDCF), with the term to last up to 40 years at 0.15 percent per annum with a 10-year grace period.

The South Korean government established the EDCF on 1 June 1987 to promote economic cooperation with developing countries. It provides financial support to partner countries for their industrial development and economic stability.

An EDCF office is planned to be open in Ukraine as well, the economy ministry said.

"Ukraine is included in the list of priority countries for bilateral cooperation with the Republic of Korea under the Official Development Assistance programme," economy minister Yulia Svyrydenko was quoted as saying.

According to her, Ukraine may receive the first tranche from the EDCF of up to USD 300 million three to four months after signing the second stage of the agreement – expected to happen in June.

The next tranche, of up to USD 3 billion, will become available for Ukraine next year.

In addition, Ukraine will be able to use South Korean facilities and experience to rebuild destroyed infrastructure, industrial and civilian facilities post-war, Ms Svyrydenko said.