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South Korea will provide Sri Lanka with US$200 million in development loans that
can be used for future infrastructure building by the South Asian country, the
finance ministry said Tuesday.
Under the memorandum of understanding, the money to come from South Korea's Economic Development Cooperation Fund (EDCF) will be used in various agricultural and public work projects as well as education and health-related programs, it said.
"The agreement is important because it raises transparency on the amount of money that will be offered, making it easier for Colombo to set up its national development plans," the ministry said.
The EDCF can make it possible for local companies to take part in the ongoing 10-year national infrastructure building plan that runs through 2016, it said.
The loans can also strengthen bilateral economic ties with the country that buys South Korean cars, knitted goods and synthetic rubber. Two-way trade between the two countries reached $426 million last year, with South Korea posting a $262 million surplus.
In the past, Seoul provided development loans to 22 projects worth $460 million, making Sri Lanka the fourth-largest beneficiary of official overseas assistance.