South Korea will offer a total of $1.1 billion won in policy funds to help support economic development projects in Latin America, the finance ministry said Saturday.
The ministry unveiled the plan at this year's Inter-American Development Bank board of governors meeting in Busan, saying that the money will help South Korean companies make inroads into various projects to be undertaken by Latin American countries.
Of the total, $1 billion will come from the country's low-interest Economic Development Cooperation Fund, with $100 million in special loans meant for infrastructure projects.
"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, emphasizing that it is a win-win arrangement for all sides.
The ministry said Latin America is a "natural partner" for South Korean companies, since the region with a total population of over 600 million is rich in natural resources.
"The IDB has offered to match the loan offered by South Korea, so the total to be made available will reach some $200 million," a finance ministry source said, requesting anonymity.
He said the money would be used for the establishment of electronic-government infrastructure and intelligent transport systems.
The official also said that the Seoul government has pledged to expand its knowledge-sharing program with Latin American countries so they can better learn from South Korea's development history and experiences.
Besides the plan to work with the IDB, the finance ministry said it inked EDCF funding agreements with Bolivia and Nicaragua.
Under the pact with Bolivia, Seoul will provide $250 million in funds for five years starting in 2015, while it pledged to give $66.3 million in soft loans to Nicaragua, it said.
In addition, South Korea's Finance Minister Choi Kyung-hwan who was tapped to be the rotating IDB chairman for one year met with his Columbian counterpart on the sidelines of the Busan meeting and agreed to work closely to quickly ratify a bilateral free trade agreement signed in February 2013, the ministry said. (Yonhap)