On October 10, during the ASEAN Summit in Vientiane, Laos, Korea and Laos signed[1] a Framework Arrangement (F/A)[2] for the Economic Development Cooperation Fund (EDCF)[3] in the presence of the leaders of both countries.

The EDCF provides concessional loans to developing nations under long-term, low-interest terms to support their economic and industrial development.

With the signing of the F/A, the EDCF loan support for the government of Laos will amount to $500 million from 2024 to 2027, maintaining the same funding level as the previous agreement from 2020 to 2023.

Laos, this year’s ASEAN Summit chair and one of Korea’s key Official Development Assistance (ODA) partners, has a strong demand for development and is a country of significant interest for Korean businesses.

This renewed agreement is expected to enhance partnership in high-value infrastructure projects, such as water resources and transportation, and further accelerate bilateral infrastructure collaboration, especially following the ASEAN Summit.

The signing of the EDCF F/A is set to include the approval of second phase of the “Comprehensive Management of the Mekong Riverbanks in Champasak Province” in October. This project is anticipated to make a significant contribution to improving the quality of life for local residents and promoting regional economic development by addressing Laos’ chronic flood and erosion issues along the Mekong River.

The Ministry of Economy and Finance has committed to fully supporting Laos’ goal of graduating from the Least Developed Country (LDC) status by 2026. In addition, the ministry will work towards expanding the participation of Korean companies in development projects in Laos, facilitating their entry into global markets.