Bangladesh set to receive soft loan of USD 3b from South Korea

A framework arrangement has been signed between Bangladesh and Korea to provide a soft loan of US$ 3 billion during the period 2023-2027.

The agreement was signed at Incheon, Korea on Thursday, says a press release of the Economic Relations Division (ERD).

The amount will be used as project assistance at various development projects in Bangladesh to be undertaken during that period.

Interest rate of the loan agreements to be signed under this framework arrangement will be 0.01 per cent to 0.05 per cent with 40 years repayment period and 15 years grace period.

However, in the case of a programme interest rate will be 1 per cent with 25 years repayment period and 7 years grace period.

On the same day, Memorandum of Understanding (MoU) on Dhaka Mass Rapid Transit Development Project (Line-4) project was signed between Bangladesh and Korea.

DMTCL under Road Transport and Highways Division will implement this project through EDCF-EDPF co-financing.

Besides, loan agreement of replacement and  modernisation  of signaling  and  interlocking  system  of   stations  of Ishurdi-Parbatipur  section  in West  Zone of Bangladesh Railway  project amounting 61 million USD to be implemented by Bangladesh Railway under the railways ministry and another Loan agreement of procurement of CNG single decker AC buses for BRTC project  amounting 77.44 million USD to be implemented by BRTC under  Road Transport and Highways Division are also signed on the same day.

Interest rate of these loans is 0.01 per cent and repayment period is 40.5 years (including 15.5 year grace period).

Economic Relations Division secretary Sharifa Khan and Korea economy and finance 1st vice minister Kisun BANG signed the framework arrangement and the MoU on Dhaka Mass Rapid Transit Development Project (Line-4) project on behalf of their respective governments.

Shahriar Kader Siddiky, additional secretary, Economic Relations Division and Hee-Sung YOON, chairman and president of Korea EximBank signed the above-mentioned two loan agreements on behalf of their respective governments.


The Korean government has been providing soft loans through the Economic Development Cooperation Fund (EDCF) for the development of socio-economic, infrastructure and ICT sectors in Bangladesh since 1993.

17 projects worth of US$ 664.77 million have been completed with assistance from the EDCF and another 7 projects worth of US$ 616.28 are currently ongoing. As of now total commitment from the EDCF has been US$ 1449.03 million. This is the second largest amount committed by the Korean government for its development partners.

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