S. Korea, Central American Development Bank Expands Joint Lending Facility

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SEOUL, July 11 (Yonhap) — South Korea’s Ministry of Finance and the Central American Bank for Economic Integration (CABEI), a regional development bank, agreed on Monday to expand their joint lending program to strengthen cooperation.

The agreement would increase the ceiling of the joint lending facility by $200 million to $340 million and extend its operation by three years to January 2025, according to the Treasury Department.

The agreement came as CABEI opened its Seoul office to strengthen ties with Asia’s fourth-largest economy.

South Korea will provide support through the Economic Development Cooperation Fund (EDCF), the low-interest loan program launched in 1987 to support economic and social infrastructure projects in developing countries.

South Korea and Central American countries jointly develop cooperation projects in various fields, including climate change and IT, and share the business costs. CABEI is responsible for the implementation and management of the projects.

To date, the program has provided loans totaling US$260 million to support five infrastructure projects in the region.

According to First Vice Finance Minister Bang Ki-sun, the Korean government hopes the EDCF-CABEI loan program will lay the groundwork for supporting infrastructure development in Central America.

CABEI was established in 1960 as a multilateral development bank to support investments in balanced development and support economic integration in Central America.

South Korea joined CABEI in January 2020 and became one of its seven non-regional member countries. The lender has eight regional member states, including El Salvador and Nicaragua.

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