S. Korea signs framework agreement to provide Ukraine with economic cooperation funds

South Korea has signed a framework agreement with Ukraine to provide the war-torn country with economic cooperation funds, the finance ministry said Sunday, paving the way for Seoul to carry out its pledge to supply US$2.1 billion in low-interest loans.

South Korean Finance Minister Choi Sang-mok signed the agreement on low-interest loan programs with his Ukraine counterpart, Sergii Marchenko, in Washington on Friday (U.S. time), according to the Ministry of Economy and Finance.

Last year, South Korea vowed to provide an additional $2.3 billion in aid for Ukraine, where the initial $200 million of aid will be provided this year in the form of humanitarian aid for responses to emergency needs in Ukraine, and the remaining $2.1 billion will be administered as long-term, low-interest loans through the Economic Development Cooperation Fund (EDCF) starting in 2025.

“Friday’s arrangement was meant to lay the legal foundation on credit assistance. The two sides agreed to explore projects together that help Ukraine’s reconstruction and development,” the ministry said in a release.

Meanwhile, Choi attended committee meetings of the World Bank and the International Monetary Fund (IMF) on Friday, and proposed the expansion of the World Bank’s co-financing platforms in cooperation with private entities and various other partners as part of efforts to achieve its goal of becoming a “better and bigger bank.”

Choi also proposed holding a replenishment meeting of the International Development Association (IDA) in South Korea in December.

The IDA under the World Bank provides grants and low-interest loans to low-income countries. Partners meet every three years to replenish its resources and review the policy framework. Talks for the 21st replenishment of its resources are under way.

During a separate meeting with IMF Managing Director Kristalina Georgieva, Choi signed a $55.96 million grant agreement for the organization’s Poverty Reduction and Growth Trust (PRGT) program.

The PRGT program was meant to make zero-interest loans for low-income African and other countries, and South Korea pledged to donate to the fund through 2027, the ministry said.

While in Washington, Choi also met with Roberto Sifon-Arevalo, sovereign managing director of global rating appraiser Standard & Poor’s Global Ratings (S&P), and held talks on the South Korean economic situation and various policy steps to spur growth, promote financial soundness and attract foreign investors.

Choi visited Washington last week to attend a meeting of finance ministers and central bank deputies of the Group of 20 nations and the first trilateral meeting with his counterparts from the United States and Japan.