The Export-Import Bank of Korea (www.koreaexim.go.kr, Chairman Kim Yong-hwan, “Korea Eximbank”) and Korea International Cooperation Agency (President Kim Young-mok, “KOICA”), Korea’s two principal ODA agencies respectively specializing in loans (funded by EDCF*) and grants, announced on August 25 a ‘Loan-Grant Harmonization Plan’.

* Economic Development Cooperation Fund (EDCF): Established by the Korean government in 1987, the EDCF promotes economic exchanges and assists developing countries in achieving industrialization and economic stability through the provision of long-term, low-interest credit.

Coming in the heels of the MOU signed between the two agencies last month, the plan contains concrete inter-agency cooperation measures to be taken at all stages of development cooperation projects, from project development and implementation to post-completion management.

Under the Plan, the two institutions have agreed to jointly develop projects and country support plans for 26 priority partner countries so as to effectively implement the Korean government’s Country Partnership Strategies (CPS) *.
* Subject to approval by the Committee for International Development Cooperation (CIDC)

The Plan envisions three different models for linking loan programs with grants.

The first model involves KOICA supporting feasibility studies and Korea Eximbank extending EDCF loans for designated projects; In the second model, KOICA supports the operation of large-scale infrastructure projects funded by EDCF with technical assistance; In the third model, EDCF loans go to fund scaled-up versions of small, KOICA-funded pilot projects which prove to be highly effective.

Cooperation between Korea Eximbank and KOICA will also be bolstered in the field of project evaluation.

The two institutions will conduct joint evaluations of projects to increase objectivity, and will regularize quarterly Project Evaluation Council Meetings to share ODA trends and evaluation know-how.

Also in the works are personnel exchanges and joint workshops to strengthen inter-agency coordination and mutual understanding.

A Korea Eximbank official said, “We will do our utmost to enhance the effectiveness of Korean ODA by going over and beyond the Loan-Grant Harmonization Plan to further expand exchanges and cooperation between the two institutions.”