Chairman Eun Sung-soo of the Export-Import Bank of Korea shakes hands with Ethiopian Finance Minister Adamasu Nebebe after approving the EDCF loan to Ethiopia at Cheong Wa Dae while President Moon Jae-in and Ethiopian Prime Minister Abiy Ahmed Ali are watching. (Photo on the courtesy of Cheong Wa Dae website)

Chairman Eun Sung-soo of Korea Export and Import Bank, who is also the chairman-nominee of Financial Services Commission (FSC), wrapped up his work before moving on to head the Financial Services Commission as chairman.

He approved the $86 million in EDCF (economic development cooperative fund) loan to Ethiopia in a meeting with Deputy Finance Minister Adamasu Nebebe of the Ethiopian Finance Ministry on Aug. 26 at his office during Ethiopian Prime Minister Abiy Ahmed Ali’s state visit to Korea.

The signing took place at Cheong Wa Dae, the presidential office in Seoul, with President Moon Jae-in and Ethiopian Prime Minister Abiy Ahmed Ali.

The Korean president agreed to provide the loan to the African nation. EDCF provides loans to under-developed countries at low interest rates to help their industrialization and promote economic exchanges with Korea.

According to Korea Eximbank, the loan will be used to supply some 1,300 types of high-quality equipment to five research centers at Amada Science and Technology University in Ethiopia. It will promote industrialization and development in science and technology in the country.

Eun said Ethiopia is the largest beneficiary of the EDCF in Africa, and it will serve as a bridge for Korean companies to advance into the African market.

The Economic Development Cooperation Fund (EDCF) is aiding Ethiopia’s economic development by establishing a power network in the south of the country and developing ground water irrigation.

In the meantime, on Feb. 23, Korea Eximbank announced that it signed a loan grant agreement to provide $264 million in foreign economic cooperation funds to the Ethiopian government for the national electricity grid power in southern Ethiopia, ground water irrigation and rural development.

On March 22, Shin Deog-yong, a senior executive director of EXIM, met with Ahmed Shide, Ethiopian minister of finance, to sign the loan agreement.

Located in the northeastern part of Africa, Ethiopia has been developing at a fast pace with an annual economic growth rate surpassing 8 percent for the past five years.

However, Ethiopia has suffered due to the poor condition of its power network which severely hampers the construction of factories and industrial complexes. Water is also an issue, as river water in the country is not safe to drink without treatment.

In light of this, EXIM decided to sign a loan grant agreement to support a total of $170 million in EDCF funding for Ethiopia’s national power grid expansion project to build national grid lines and construct a substation in southern Ethiopia.

It is the largest unilateral EDCF fund ever granted to Ethiopia.

Once the project is complete, it is expected to contribute greatly to the local power and economic development by supplying stable electricity to nearby plants and industrial complexes.

In addition, the Groundwater Irrigation and Rural Development Project, which will be supported with $94 million in funds, includes groundwater wells and irrigation development projects in Oromia, Ethiopia, to improve the agricultural value chain.

It is expected to create sanitary drinking water and help educate Ethiopians on the Korean approach to rural development.

“Our support for the infrastructure of Ethiopia’s national development plan will greatly contribute to the increased partnership between the two countries and the ‘Korean companies’ overseas expansion into Africa,” said Shin at the signing ceremony.

A view of the building in downtown Seoul where the Korea Eximbank is located. (Photo: Korea Eximbank)