New framework arrangement soon: Korean EXIM Bank to enhance project financing to $1bn

ISLAMABAD: The Korean EXIM Bank would soon sign a new framework arrangement with Pakistan (2022-26) for enhancing existing level of financing from $500 million to $1 billion for implementing new projects in road sector, climate change, healthcare, and IT sector development.

This was informed during a meeting of a high-level Korean delegation, led by Chong Hwa Lee, director general, Ministry of Economy and Finance, Republic of Korea, who called on the Minister for Economic Affairs, Omar Ayub Khan, during their two-day visit to Islamabad.

Suh Sangpyo, ambassador of the Republic of Korea in Islamabad and representatives of Korean EXIM Bank also participated in the meeting.

The Minister for Economic Affairs appreciated the role played by the EXIM Bank for financing various development projects in Pakistan.

The minister expressed that Pakistan desired to implement more development projects in IT, social sector, and infrastructure under Korean financing facilities.

"The mobilisation of financial resources from the Exim Bank would contribute in social and economic development of Pakistan," the minister added.

At present, five development projects i.e. Technology Park in Islamabad, Kalkatak-Chitral Road, Chakdara-Timergara Road, Malakand Tunnel, and Children Hospital in Sukkur are under implementation with US$ 343 million financing by the EDFC/EXIM Bank of Korea.

The Korean-side informed that the EXIM Bank would soon sign a new Framework Arrangement with Pakistan (2022-26) for enhancing existing level of financing from US$ 500 million to US$ 1 billion for implementing new projects in road sector, climate change, healthcare, and IT sector development.

The Minister for Economic Affairs appreciated the Government of Republic of Korea for their enhanced support for various development projects and disaster management including combating Covid-19 pandemic and locust in Pakistan.

On the sidelines of the meeting, a loan agreement for establishment of IT Park in Karachi was also signed.

The total cost of project is around US$199 million.

Out of which, the EXIM Bank Korea will provide $158 million.

This project is aimed at providing IT-enabled high-tech infrastructure, wherein, IT companies can work together by leveraging each other's expertise, foster industry-academia cooperation and promote entrepreneurship in Pakistan.

The IT Park will provide state-of-the-art modern infrastructure to national and international IT firms for establishing their office in Karachi.

The financing agreement was signed by Zulfiqar Haider, secretary, EAD and Chong Hwa Lee, director general, Korea.

During this visit, both sides also held Policy Dialogue under the EDCF Framework in Economic Affairs Division.

Zulfiqar Haider, secretary EAD welcomed the delegation and expressed that the Government of Pakistan attached great importance for its relations with Republic of Korea. He appreciated the efforts made by Korean Exim Bank for financing potential projects in healthcare, road infrastructure development, IT Sector and mitigating climate change. Both side discussed future roadmap for mobilizing financing for potential projects and ways for expediting implementation of projects.

Chong Hwa Lee thanked Pakistani side for their hospitality and informed that Government of Republic of Korea would continue its endeavours for mobilising financial and technical resources for development projects in Pakistan.

The Ministry of Information Technology and Telecommunication has already laid the foundation stone of Information Technology Park Chak Shahzad, Islamabad, which would be built with an estimated cost of Rs13.70 billion in 28 months and financed by the Korean EXIM Bank.

The IT Park would be developed with state-of-the-art infrastructure and allied facilities for the ICT companies with financial assistance of Rs13.70 billion @ 0.1 percent for 40 years by the Exim Bank, Korea. The IT Park Islamabad will consist of 12 storeys (10 storeys above and two storeys underground) self-contained building having covered area of 66,893 square meters.

The IT Park constructions were key projects of the Economic Development Cooperation Fund (EDCF).

In year 2019, a framework agreement was signed with Pakistan to provide 500 million dollars of the EDCF loans that gave financial space for the construction of infrastructure in Pakistan.

Copyright Business Recorder, 2021