South Korea to Provide Uzbekistan with Loans Worth $595 Million
Thursday 6 September 2012
TASHKENT (Trend news agency) – The Uzbek Finance Ministry and the Korean Strategy and Finance Ministry signed a memorandum of understanding (MoU) envisaging the allocation of preferential long term loans to Uzbekistan from the Korean government’s Economic Development Cooperation Fund (EDCF) for an amount of US $595 million in 2012-2015.
- Types of Loans
Development Project Loan: Provides funds for infrastructure projects such as those involving the construction of roads, railways, hospitals, vocational training centres, and water supply and sanitation systems under the economic development plan of the partner country.
Equipment Loan: Provides funds to procure equipment and other materials needed for projects under the national development plan in specific sectors or specific regions of the partner country.
Public-Private Partnership Loan: Provides funds for governments or corporations of partner countries to conduct Public-Private Partnership projects.
Two-Step Loan: Provides funds to make sub-loans to end-users through the financial institutions of the partner country for the implementation of designated policies, such as the promotion of small and medium sized enterprises (SMEs) in manufacturing, agriculture, and other specified industries.
Commodity Loan: Provides funds to import commodities, bilaterally agreed upon, to contribute to the economic stabilization of the partner country.
The document was signed during the official visit of Strategy and Finance Minister Jae-Wan Bahk to Uzbekistan on Aug 31-Sept 2. The memorandum reflects the basic parameters of the cooperation programme with the EDCF, to be implemented over the next three years. In particular, the agreement on a priority project implementation was reached to create a children’s multidisciplinary medical centre by equipping it with high-tech diagnostic, medical and other special equipment.
The Government of Korea established the Economic Development Cooperation Fund (EDCF) on June 1, 1987 with the purpose of promoting economic cooperation between Korea and developing countries. Drawing on Korea’s own development experience over the years, the EDCF assists partner countries by providing funding for their industrial development and economic stability. Its main areas of assistance are human resources and economic infrastructure.
In terms of economic infrastructure assistance, among other fields, EDCF has emphasized the importance of reducing the “digital divide” by seeking ways to assist partner countries in their development of the information technology (IT) industry. In this area, EDCF will assist Uzbekistan to create a national comprehensive electronic library by digitalizing educational and scientific works contained mainly in the Alisher Navoi National Library.
The programme also includes projects on equipping the National TV and Radio Broadcasting Company with digital equipment, developing a modern material and technical base of secondary and secondary special education and increasing efficiency of using energy resources.
The total amount of Korean companies’ investments in Uzbekistan exceeds $5 billion. The bilateral trade volume increased by 47% – up to $1.152 billion in the first half of this year. More than 360 Uzbek enterprises have partnership with Korean companies, out of which 59 have 100% Korean capitals. They operate in the area of trade, mining, chemical and food industries, as well as in the sector of machine-building, metal-working manufacturing, healthcare, tourism and services. Currently, 84 Korean companies are registered at the Ministry for Foreign Economic, Investment and Trade of the Republic of Uzbekistan.