South Korea unveils plans to allocate 13.8 trillion won (approximately $10.39 billion) in low-interest rate loans for developing countries’ projects, focusing on green growth, digital transition, and other developmental initiatives by 2026. This ambitious endeavour, under the Economic Development Cooperation Fund (EDCF), encompasses reconstruction projects in Ukraine and signifies South Korea’s commitment to becoming a leading contributor to global development aid.
The South Korean Ministry of Economy and Finance reveals its intention to earmark 4.5 trillion won for new projects under the EDCF in the current year, with allocations of 4.6 trillion won and 4.7 trillion won scheduled for 2025 and 2026, respectively. This marks a significant increase from the previous three-year budget, reflecting South Korea’s heightened focus on international development initiatives.
The allocated loans will prioritize projects aimed at addressing climate change, facilitating digital transition, and enhancing public health infrastructure in recipient countries. With a strategic emphasis on sustainable development, South Korea aims to play a pivotal role in promoting global efforts to combat climate change and accelerate the digital transformation of economies worldwide.
South Korea’s three-year plan underscores a commitment to regional diversity, with Asia expected to account for 60 to 70 per cent of the envisioned projects and African nations comprising 20 to 30 per cent. The ministry emphasizes the importance of extending support to countries with significant potential in Africa and South America, aligning with South Korea’s broader foreign policy objectives.
A notable component of the plan involves supporting reconstruction efforts in war-torn Ukraine through projects totalling $2.1 billion. Additionally, South Korea intends to forge new partnerships with countries such as India, Bolivia, and the Ivory Coast, further expanding its global development footprint and fostering international cooperation.
In line with its commitment to global cooperation, South Korea pledges to enhance collaboration with key stakeholders, including the United States, Japan, and other major contributing nations. By leveraging multilateral partnerships, South Korea seeks to ensure stable supply chains and promote sustainable economic development on a global scale.