The South Korean government has agreed to establish a US$100 million fund for infrastructure investments in Latin America and provide up to $1 billion in bilateral financing for developmental projects in the region.
In an agreement signed with the Inter-American Development Bank (IDB), the South Korean government has also committed to finance programs designed to export Latin American products to the outside world, in addition to sharing its experience in economic development.
To benefit from the fund, governments in the region need to enact developmental policies and draw up blueprints for their programs.
According to reports, Seoul will provide matching funds alongside the IDB, which has long been funding numerous infrastructure programs across the region.
$1 billion will come from South Korea’s Economic Development Cooperation Fund (EDCF), with $100 million to be given in the next two years to spur the region’s infrastructure development.
Connecting Seoul’s expertise in information technology and manufacturing with Latin America’s abundant mineral and energy resources will benefit all parties, said South Korea’s finance minister Choi Kyung-hwan.
Kyung-hwan stated that his country would charge very little interest for the loans, given that South Korea is well aware of how hard it is for developing countries to raise funds for large infrastructure projects.
He later said Seoul would like to share its past development experiences with Latin American countries and strive for joint prosperity.
According to South Korean papers, Seoul has also reached an understanding to provide extra support funds to Bolivia and Nicaragua.