Korea to pump $450 million into development bank

Korea plans to join a multilateral development bank in Central America to tap deeper into the region’s infrastructure projects, Seoul’s Finance Ministry said Thursday.

Korea plans to chip in $450 million for the Central American Bank for Economic Integration (Cabei) to acquire a 7.58 percent stake, the second-largest held by a non-regional member after the 11.62 percent held by Taiwan, according to the Ministry of Strategy and Finance.

The ministry said it expects all procedures for the participation in the multilateral lender to be completed this year.

Last year, Seoul unveiled a plan to put $100 million into the multilateral lender through Korea’s state-run Economic Development Cooperation Fund. The agreement helped Korean companies make inroads into the Central American region.

Founded in 1960, Cabei is aimed at extending loans to private and government-led development projects in the Central American region. It has 13 members, including Guatemala, Honduras and Costa Rica.

The ministry expects Seoul’s development expertise to be useful for infrastructure projects in the region.

Last year, Korea and five Central American countries, including Nicaragua, El Salvador and Honduras, initialed a free trade agreement, which is expected to pave wider ways for Asia’s fourth-largest economy to tap deeply into the region.

Korea has clinched a series of free trade agreements in recent years as part of its efforts to boost growth in the export-driven economy. YONHAP