Eximbank pushes to offer 'program lending' to Vietnam

By Lee Minji SEOUL, July 7 (Yonhap) -- The Export-Import Bank of Korea (Eximbank) said Thursday that it plans to extend a "program loan" to Vietnam during the second half of the year, the first of its kind. The policy lender said it plans to lend US$30 million to the Vietnamese government's climate change project, in which foreign aid groups such as Japan International Cooperation Agency and French Development Agency, are expected to take part. The total size of the program loan is yet to be finalized. A program loan is usually extended to finance a developing country's comprehensive development plan, whereas project loans are extended for individual projects. "Vietnam was chosen since there are many Korean companies operating in the country. The program loan extension will pave the way for South Korea to get involved in Vietnam's development plan establishment," an Eximbank official said. South Korea has financed a total of $1.25 billion on 36 Vietnamese projects via its economic development cooperation fund (EDCF). In May, a record $200 million was extended for a Mekong River construction project. South Korea has been pushing to improve its EDCF system by introducing program loans and expanding financing on development agendas set by the Group of 20 major economies.