The Ukrainian economy will receive preferential loans equivalent to $2.1 billion from the Economic Development Cooperation Fund (EDCF) over the next five years. The project of the corresponding Framework Agreement between the Government of Ukraine and the Government of the Republic of Korea was approved by the Cabinet of Ministers of Ukraine at a meeting on April 2, 2024. The signing of the Framework Agreement by the Ukrainian Government was entrusted to the First Deputy Prime Minister of Ukraine and Minister of Economy of Ukraine Yulia Sviridenko.
"Another step has been taken towards finalizing all necessary internal procedures and starting the practical implementation of agreements with our Korean friends. Ukraine or a Ukrainian resident who receives state guarantees will be able to attract preferential loans from EDCF. The funds will be used for equipment procurement and reconstruction projects," said Yulia Svyrydenko.
Under the terms of the Framework Agreement, the Government of Korea provides the Borrower with the opportunity to receive loans from EDCF up to the maximum commitment amount in Korean won, not exceeding the equivalent of two billion one hundred million US dollars ($2,100,000,000) for 2024-2029 for financing EDCF projects in Ukraine. The Governments of Korea and Ukraine are to identify candidate projects in close cooperation with each other. Details of each individual project, the amount, and the terms of lending will be determined in separate credit agreements concluded between the Export-Import Bank of Korea and the borrower.
It is worth noting that the Agreement on EDCF loans was signed by the First Deputy Prime Minister of Ukraine, Minister of Economy of Ukraine Yulia Sviridenko, and the Ambassador of Korea to Ukraine Kim Hyong on September 13, 2023, in the presence of the President of Ukraine Volodymyr Zelensky and the Minister of Land, Infrastructure and Transport of Korea Heo Ryong Won. The document was ratified by the Verkhovna Rada of Ukraine on December 21, 2023.
According to the Agreement, at the first stage, such loans can be used for equipment supply. From 2025, it will be possible to attract infrastructure loans for reconstruction.
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Background: The Economic Development Cooperation Fund (EDCF) was established by the Government of the Republic of Korea to promote economic cooperation between Korea and developing countries. The Fund provides financial support to partner countries for their industrial development and economic stability.
