- 40-year repayment with additional 10-year grace period
- Loan to be utilised to finance projects in SL
- Funds to come under Economic Development Co-operation Fund
The Government of the Republic of Korea has agreed to provide concessional loans up to an aggregate commitment amount of $ 500 million to finance mutually agreed projects in Sri Lanka as a measure taken to strengthen the economic co-operation between two countries.
As per a statement from the Ministry of Finance, the concessional loans are provided from the Economic Development Cooperation Fund (EDCF) of the Export Import Bank of Korea (KEximbank).
Accordingly, the Government of Republic of Korea and the Government of Sri Lanka have agreed to sign a new Framework Arrangement for the period of 2020-2022 in order to obtain loans through EDCF to finance projects that are mutually agreed upon (up to the amount of $500 million).
In addition, the loan interest rate on this concessional loan was reported to be 0.15%-0.20% whereas the loan has a repayment period of about 40 years with a grace period of 10 years.
Furthermore, both countries agreed to continue the Korean Exim Bank Representative Office, which was opened in Colombo in January 2016 by its Chairman, to further implement the projects in a well co-ordinated manner.
The Framework Arrangement was signed yesterday (10) by the Secretary to the Treasury as well as the Ministry of Finance S.R. Attygalle on behalf of the Government of Sri Lanka, and the Ambassador of the Republic of Korea Woonjin Jeong, who represented the Republic of Korea.