□ The Export-Import Bank of Korea (www.koreaexim.go.kr, Chairman Yoon Hee-sung, “Korea Eximbank“) announced on June 30th that it will provide a total of US$ 810 million in loans for ‘the Construction in Rail-cum-Road Bridge across the River Karnaphuli at Kalurghat Point, Chattogram Project’ in Bangladesh (or simply the Karnaphuli Railway and Road Bridge Construction Project).
□ On June 27th, Chairman Yoon met with Bangladesh’s Vice Minister of Finance Shahriar Kader Siddiky in Dhaka. During the meeting they signed a Loan Agreement to provide US$ 720 million through the Economic Development Cooperation Fund (EDCF) and US$ 90 million through the Economic Development Promotion Facility (EDPF).
* The Economic Development Cooperation Fund (EDCF) : Korea Eximbank has been entrusted by the Ministry of Economy and Finance to operate and manage the fund for developing countries since 1987. It provides long-term, low-interest loans to support industrial development and economic stability in developing countries, and promotes economic exchanges between developing countries and Korea.
* The Economic Development Promotion Facility (EDPF) : It is a type of aid fund that provides long-term, low-interest loans for large-scale infrastructure projects in developing countries. EDPF offers loans at interest rates lower than the borrowing cost of Korea Eximbank, with the difference between the borrowing cost and the interest rate provided being covered by government funds (the Economic Development Cooperation Fund.
□ The Karnaphuli Railway and Road Bridge Construction Project will construct a combined railway and road bridge across the Karnaphuli River in Chattogram located in southeastern Bangladesh, along with its connecting roads.
о The total project cost is estimated at US$ 1.24 billion, with contributions from the Bangladesh government (US$ 430 million), EDCF (US$ 720 million), and EDPF (US$ 90 million).
о This project marks a significant milestone for EDCF, representing the largest project it has supported ever. Given the mega scale of the project, additional funding was provided through EDPF as well.
о As Korean companies are participating in this project, their performance in this large-scale project is expected to serve as a foothold for their future expansion into other major construction projects in Bangladesh and the broader Southwest Asian region.
о Korea Eximbank views this loan provision as an example of “regionally tailored ODA support” aligning with both Bangladesh’s massive infrastructure needs and the Korean government’s ”Indo-Pacific Strategy.“
□ Upon successful completion, the rail-road bridge will serve as the sole dual-purpose bridge connecting Chattogram, Bangladesh’s largest port to a key industrial zone in the region. This transformative project will significantly enhance transportation convenience, overhaul logistics infrastructure, and ultimately contribute substantially to the nation’s export growth.
□ Following the signing ceremony, Chairman Yoon met with Bangladesh’s Prime Minister Sheikh Hasina. During the meeting Chairman Yoon commended Bangladesh’s impressive economic growth, saying “It is very impressive that Bangladesh has maintained a high average economic growth rate of around 6% since the 2000s, and the manufacturing sector's contribution to GDP has significantly increased from 9% in the 1970s to 22% in 2022.” He added, “Korea Eximbank is committed to supporting Bangladesh’s industrial modernization in collaboration with the Korean government by leveraging diverse financial tools such as EDCF and EDPF to facilitate essential infrastructure construction.”
□ With a population of approximately 170 million (the world’s eighth largest) and a GDP of $460 billion (ranked 33rd globally in 2022), Bangladesh stands as a strategic partner for Korea. Already boasting the highest EDCF approvals of $28.2 billion as the end of last year, this significant loan signifies the immense potential for even stronger economic cooperation between the two nations.
