The South Korean Ministry of Finance has pledged $100 million in special loans to fund infrastructure projects in Latin America.
The announcement, which the ministry made while attending the annual Inter-American Development Bank board of governors meeting in Busan, South Korea, is part of a $1.1 billion package of policy funds being extended by the Economic Development Cooperation Fund (EDCF) to help support development projects in the region.
“The broad plan can promote economic growth in developing economies while at the same time expanding cooperative tieups between the region and South Korea,” the ministry said in a statement.
A ministry official also noted that the IDB will match the funds, bringing the total loan capacity to up to $200 million, according to a Yonhap News Agency release.
The aim of the loan program is to spark development, while providing low-interest vehicles to encourage participation from nations that otherwise might shy away from borrowing.
It comes in the wake of partnerships recently crafted by EDCF with a number of individual Latin American nations. Under the organisation's agreement with Bolivia, South Korea is to provide $250 million over five years starting this year. In Nicaragua the agency has pledged $66.3 million in soft loans.
Korean officials believe that Latin America is a “natural partner” for the Asian nation's business sector, as it is a region rich with resources and a population of more than 600 million.
They also hope that such investments will open up Latin American markets to Korean companies, according to the Yonhap release.