The Republic of Korea has pledged a Korean Won 6.6 billion (US$ 4.5 million) increase in its technical cooperation funding to support EBRD projects.
The Korean Minister of Strategy and Finance, Jeung-Hyun Yoon, and EBRD President Thomas Mirow signed a Memorandum of Understanding to deepen collaboration in support of economic development in the Bank's countries of operation.
The funding will be extended to support infrastructure and energy efficiency, in addition to the information technology and telecoms sector.
Under the accord, the Republic of Korea will replenish the EBRD - Korea Technical Assistance and Cooperation Fund by Korean Won 6.6 billion. About US$ 880,000 of the replenishment will be earmarked as a contribution to the EBRD’s multi-donor Early Transition Countries (ETC) Fund*.
"The additional support for EBRD projects from the Republic of Korea is particularly welcome during this time of global economic crisis when the ability to prepare the way for and deliver new investment is critically important," said President Mirow.
"We expect to expand the scope of the Fund to support the ODA** countries and to assist in the stabilisation of their economies and transition into market-based economies. We will continue our efforts to strengthen the cooperation with the EBRD,” Minister Yoon said.
The EBRD - Korea Technical Assistance and Cooperation Fund was set up in May 2007, initially with US$ 1.5 million to provide technical cooperation funds to support EBRD projects. These funds are untied, which means that they can be used without any restriction on the nationality of the firm or experts contracted in particular projects.
Donor funds play a crucial role in fostering the transition to market economies, by enabling EBRD clients to prepare sound investments and also by helping to develop and improve institutional and regulatory frameworks.
The Korean Fund's first technical cooperation funding was to support the Kyrgyz financial sector and helped the introduction of new financial products such as leasing and mortgage finance. Korea has also funded improvements in the legal and regulatory environment within the telecom sector in Tajikistan, as well as projects within the EBRD's TurnAround Management programme in Azerbaijan.
* The Early Transition Countries (ETC) multi-donor Fund is a financing instrument created in 2004 to respond to the needs of Armenia, Azerbaijan, Georgia, Kyrgyz Republic, Moldova, Mongolia, Tajikistan and Uzbekistan.
** Official development assistance is a category of aid development used by the Organisation for Economic Cooperation and Development (OECD) to describe the assistance delivered to countries in the first part of the aid recipients' list