144th EDCF Management Committee Meeting
Government Steps up efforts to Improve EDCF Effectiveness
Deputy Prime Minister Kyungho CHOO presided over the 144th Economic Development Cooperation Fund (EDCF) Management Committee Meeting[1] on January 26 to discuss three agenda items: Mid-term EDCF operation directions from 2023 to 2025, measures to enhance support for Korean companies’ entering overseas markets in association with EDCF projects and improvement of EDCF support for health care and medical infrastructure projects.
The following is a summary of DPM CHOO’s opening remarks.
Mid-term EDCF operation directions from 2023 to 2025
While economic uncertainties in developing countries are projected to intensify due to global economic slowdowns, demand for development financing is to continuously grow to help developing countries respond to climate change and attain digital transformation.
In response, the Korean government will assist developing countries in achieving economic growth and strengthen economic cooperation with them through continued expansion of EDCF loans. To be specific, the government plans to approve 3.8 trillion won to finance new EDCF projects this year, which is 0.7 trillion won higher from a year ago, and the figure is expected to increase to a total of 11.7 trillion won by 2025.
In addition, EDCF loans will be primarily allocated to the green and digital sectors to satisfy developing countries’ needs with an aim to improve development effectiveness. By region, Asia will be a major destination for the loans given the need to deepen economic cooperation in the region. The government also plans to further expand the EDCF investment in countries with high growth potential such as Africa and Latin America, which will give more opportunities for Korean companies to make inroads into overseas markets in association with EDCF projects.
The government will step up efforts to manage recipient countries’ economic risks by closely monitoring their economic situations to preemptively detect any signs of economic crisis and provide immediate support for them in case of emergency such as disasters through emergency loans.
Measures to enhance support for Korean companies’ entering overseas markets in association with EDCF projects
The government will strengthen support for Korean companies’ expanding business overseas through the EDCF projects in partner countries. As of the end of 2022, the EDCF has financed a total of 23.0 billion dollars to support for infrastructure projects in 58 recipient countries, creating indirect benefits to Korean companies that plan to enter overseas markets as well as contributing to the countries’ economic growth.
Looking ahead, the government will work together with the private sector to devise measures in order to improve Korean companies’ international competitiveness in project bidding. It will also strive to explore large-scale infrastructure projects worth over 100 million dollars and provide more packaged concessional loans that consist of EDCF, Economic Development Promotion Facility (EDPF) and export financing.
Improvement of EDCF support for health care and medical infrastructure projects.
As an attempt to boost EDCF effectiveness, the government will strengthen its cooperation with relevant organizations to carry out health care and medical infrastructure projects. To this end, the government will build a cooperation strategic model that covers the entire project process ranging from project planning to post-project support for health care and medical sectors which have seen the most active cooperation under both concessional loans and grants.
In the mid- to long-term, the government will work to apply the cooperation strategic model to other sectors such as transportation and information and communication technology (ICT) by seeking cooperation with related ministries with a view to further improving EDCF effectiveness.
[1] The meeting was joined by ministers and vice ministers from related ministries including Ministry of Science and ICT, Ministry of Agriculture, Food and Rural Affairs, Ministry of Trade, Industry and Energy, Ministry of Health and Welfare, Ministry of Land, Infrastructure and Transport, Ministry of Oceans and Fisheries, Office for Government Policy Coordination and the Export-Import Bank of Korea’s chairman and president and the Korea International Cooperation Agency’s officials.
Please refer to the attached pdf.
