South Korea, Central American Development Bank to expand joint lending facility

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SEOUL, July 11 (Yonhap) — South Korea’s finance ministry and the Central American Bank for Economic Integration (CABEI), a regional development bank, agreed on Monday to expand their joint lending program in a bid to boost cooperation.

The agreement provides for raising the ceiling of the joint loan facility from $200 million to $340 million and extending its operation for three years until January 2025, according to the Ministry of Finance.

The deal was struck when CABEI opened its office in Seoul with the aim of strengthening ties with Asia’s fourth-largest economy.

South Korea will provide support through the Economic Development Cooperation Fund (EDCF), the low-interest loan program launched in 1987 to support economic and social infrastructure projects in developing countries.

South Korea and Central American countries are jointly developing cooperation projects in various fields, including climate change and IT, and sharing business costs. CABEI is in charge of the implementation and management of the projects.

So far, a total of $260 million in loans has been disbursed under the program to support five infrastructure projects in the region.

The Korean government hopes the EDCF-CABEI loan program will lay the foundation for supporting infrastructure development in Central America, according to First Deputy Finance Minister Bang Ki-sun.

CABEI was established in 1960 as a multilateral development bank to help invest in balanced development and support economic integration in Central America.

South Korea joined CABEI in January 2020, becoming one of its seven non-regional member countries. The lender has eight regional member states, including El Salvador and Nicaragua.

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