The Export-Import Bank of Korea (www.koreaexim.go.kr, Chairman Lee Duk-Hoon, "Korea Eximbank") announced on October 26 that it will provide a total of USD 200 million in EDCF loans to support the "Wastewater Treatment System Development in Dares Salaam Project in the United Republic of Tanzania (USD 90 million)" and the "National Radiotherapy and Oncology Center Project in the Republic of Cote d'Ivoire (USD 110 million)."
* The Economic Development Cooperation Fund (EDCF) was established by the Korean government in 1987 to promote economic exchanges and to assist developing countries in achieving industrialization and economic stability through the provision of long-term, low-interest credit. As of the end of September 2016, EDCF has supported 360 projects in 53 countries with KRW 13.4 trillion (commitment basis).
Korea Eximbank Chairman Lee Duk-Hoon met with Tanzanian Finance Minister Philip Mpango and Ambassador Sylvestre Kouassi Bile of Cote d'Ivoire respectively at the 2016 Korea-Africa Economic Cooperation (KOAFEC) Ministerial Conference held at the Grand InterContinental Hotel in Seoul to sign the loan agreements.
"The Wastewater Treatment System Development in Dares Salaam Project" supports the construction of the new sewerage system network, a modern wastewater treatment plant and pumping station in Tanzania.
It will contribute to preventing environmental pollution created from rapid urbanization in Dares Salaam, thereby improving public health and sanitation.
Korea Eximbank has supported 11 projects in agriculture, road, electric power, education and health sectors in Tanzania, providing USD 445 million in EDCF loans for the development of the country and increased investments of Korean companies into Africa.
"The National Rediotherapy and Oncology Center Project" in Cote d'Ivoire aims to construct a 200-bed radiotherapy and oncology center, provide medical equipment, establish the Hospital Information System, and assist staff training and education through EDCF.
Upon completion of this project, the National Rediotherapy and Oncology Center in Cote d'Ivoire is expected to be the top healthcare center specializing in cancer treatment in western Africa, fully transferring Korea's high-end medical equipment and skills for cancer treatment.
Chairman Lee remarked, “To keep pace with the UN's Sustainable Development Goals (SDGs) and the Korean government's Four Key Initiatives for Development Cooperation, EDCF will continue to expand aid in Africa to end poverty, improve health, strengthen cooperation by mobilizing private funds, and support Korean companies in entering into the African market."
Aside from EDCF financing, Korea Eximbank signed a Memorandum of Understanding ("MOU") with the African Export-Import Bank("Afreximbank")* to set a credit line amounting to USD 100 million to support Korean companies to expand business in Africa.
Chairman Lee met with Afreximbank Chairman Benedict Okey Oramah and signed the MOU at the Seoul Grand InterContinental Hotel on October 26.
Afreximbank has 41 member countries including Nigeria and Kenya. It is a financial institution located in Egypt which offers loans and guarantees to promote trade of the member countries. It has USD 7.1 billion in total assets and USD 1.3 billion in capital as of 2015.
Interbank Export Credit is a financing technique for which Korea Eximbank and a foreign local bank sign an agreement on the credit line to enable the local bank to provide financing, which was received from Korea Eximbank at favorable terms and conditions, to its local companies which have business relationships with Korean companies.
Local banks and companies can have both direct and indirect benefits from low interest rates and flexible loan period, while Korean companies can expand local business.
A Korean Eximbank official remarked, "This MOU is expected to give needed financial support to Korean companies that are highly motivated to export goods to Africa, which is likely to increase Korean SME's exports to Africa in general."
EDCF has supported USD 260 million for 62 projects in 20 countries in Africa.
This takes up 22% of EDCF's total commitments, which is the second-largest share after Asia.
More recently, there is an increasing demand for infrastructure development in sub-Saharan African countries thanks to the end of civil wars and stable governance. It is also expected that the middle-income bracket will gradually grow larger. These factors combined are giving reason for Korean companies to look to Africa as a new land of opportunities.
