Ukraine secures $100 mln loan agreement with Republic of Korea for first-ever preferential financing

Today, October 2, the Minister of Finance of Ukraine, Serhii Marchenko, signed a loan agreement with the Export-Import Bank of Korea to attract USD 100 million.

The Ministry of Finance of Ukraine reported that.

The ministry stated that in April 2024, Ukraine and the Republic of Korea signed an Agreement allowing Ukraine to secure loans up to 2.1 billion US dollars between 2024 and 2029.

The attraction of 100 million US dollars will be the first financial support from the Republic of Korea to the state budget of Ukraine.

The loan is drawn for 20 years, and the interest rate is 1.0% per annum. The grace period is five years from the date the credit agreement is signed.

"Despite thousands of kilometers between Ukraine and the Republic of Korea, our partnership continues to strengthen. I am grateful for the constructive cooperation that resulted in the mobilization of resources for Ukraine's urgent budgetary needs. Further projects, which will be implemented as part of bilateral cooperation with the Korean side, will be aimed at supporting the economic development of Ukraine and will contribute to further mutually beneficial cooperation between the countries," Minister of Finance of Ukraine Serhii Marchenko said.

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It should be noted that during a gathering of NATO allies and partners in Washington in July 2024, South Korean President Yoon Suk Yeol declared that his country would remain committed to backing and aiding Ukraine. He also announced plans to increase South Korea's contributions to the NATO trust fund for Ukraine to 24 million US dollars in the coming year, double the current amount.

The publication notes that in June, South Korea contributed $12 million to the NATO trust fund "Comprehensive Package of Assistance to Ukraine" to support the construction project of a military medical clinical rehabilitation center.

In 2022, South Korea provided Ukraine with $100 million in humanitarian aid.

In 2023, it handed over $150 million in short-term aid and promised $300 million this year.

Next year, Seoul intends to offer Ukraine $2 billion in long-term low-interest loans through the Economic Development Fund and provide 200 power generators to support Ukraine's energy sector.

Yoon's participation in this year's NATO summit drew increased attention because South Korea had said it might review its ban on the supply of lethal weapons to Ukraine in response to the military deal between North Korea and Russia, but that was not discussed at the summit.