The Export-Import Bank of Korea (www.koreaexim.go.kr, Chairman Lee Duk-hoon, “Korea Eximbank") announced on October 27 that the Bank will provide EDCF* loans, total amount of USD 190 million to fund the "Procurement of 20 Nos. Meter Gauge Locomotives Project" and "Procurement of 150 Nos. Meter Gauge Passenger Carriages Project" in Bangladesh.

* The Economic Development Cooperation Fund (EDCF) was established by the Korean government in 1987 to promote economic exchanges with the developing world and to assist developing countries in achieving industrialization and economic stability through the provision of long-term, low-interest credit. Korea Eximbank currently manages the fund as its trustee. A total of KRW 13,358 billion in EDCF loans (commitment basis) has been provided to 360 projects in 53 countries as of the end of September 2016.

Korea Eximbank signed the loan agreement for these projects in accordance with the Korean government's approval in December 2015.

It will be the largest amount EDCF has co-financed with the Asian Development Bank (ADB) in the transport sector. ADB will lend USD 560 million to build dual track railways and improve the railway signaling system for the projects.

The projects aim to make the procurement of 170 meter gauge locomotives and passenger carriages, supply equipment for rolling stock management and give skills and maintenance training.

The new locomotives and passenger carriages will be used on the railroad route between Dhaka, the capital and largest city of Bangladesh, and Chittagong, the main industrial city and trade port in the southeast part of the country.

Once the projects are completed, the Dhaka-Chittagong section's share in passenger transportation is expected to rise from 2.8% to 4.4% while the section's share in freight transportation is projected to jump from 3.8% to 6.8%.

The projects are also expected to greatly contribute to modernizing the outdated railway infrastructure, improving rail transport speed, and reducing logistics costs in Bangladesh.

A Korean Eximbank official remarked, "These EDCF-ADB funded projects in Bangladesh are anticipated to have a positive impact on introducing Korea's outstanding railway technologies to the country and pave the way for competent Korean companies to win the bid for follow-up projects in the railway sector, using ADB funds as a leverage.

Prior to these projects, Korea Eximbank had funded a total of USD 89 million over three times to provide locomotives in Bangladesh since 1996.