Korea signs preliminary deal with Ukraine to offer low-interest rate loans

Economy

Korea signs preliminary deal with Ukraine to offer low-interest rate loans

Published: 17 May. 2023, 18:33 Updated: 17 May. 2023, 18:37

Finance Minister Choo Kyung-ho, right, and his Ukrainian counterpart Yulia Svyrydenko sign the Economic Development Cooperation Fund on Wednesday at The Shilla hotel in central Seoul. [YONHAP]

The Korean government signed a preliminary agreement with Ukraine to offer low-interest rate loans through its aid fund to help the war-torn country rebuild urban infrastructure.

Finance Minister Choo Kyung-ho signed the Economic Development Cooperation Fund (EDCF) project, the finance ministry said Wednesday.

The minister hailed the move as paving the way for Asia's No. 4 economy to support Ukraine via the EDCF during his meeting with his Ukrainian counterpart Yulia Svyrydenko in Seoul, according to the Ministry of Economy and Finance.

The preliminary agreement signed on Wednesday will be implemented in the future after going through domestic procedures in both countries.

During the meeting, Choo also expressed hope for the end of the war and the restoration of peace in Ukraine.

Korea wishes to cooperate with Ukraine in various areas, especially on post-war reconstruction efforts, he added.

The two countries vowed to work closely on follow-up measures to find projects under the EDCF program.

After conducting feasibility studies for the development projects filed by Ukraine, the amount of funding will be decided.

Korea launched the EDCF program in 1987 with the purpose of supporting economic and social infrastructure projects in developing countries.

Korea offered humanitarian aid worth $100 million to Ukraine in 2022.

In February, the government announced its plan to provide additional assistance worth $130 million.

On Tuesday, President Yoon Suk Yeol met with Ukraine's first lady Olena Zelenska at the presidential office, saying Korea will provide active assistance to her country in close coordination with the international community.

Yoon recently signaled a shift in the policy of providing only non-lethal aid to Kyiv, saying in an interview with Reuters last month that it might be difficult to insist only on humanitarian or financial assistance if Ukraine comes under a large-scale attack on civilians.

BY PARK EUN-JEE, YONHAP [park.eunjee@joongang.co.kr]