ID :
208239
Tue, 09/20/2011 - 09:57
Auther :
Shortlink :
https://oananews.org//node/208239
The shortlink copeid
Interest due on failed N. Korea energy project loan close to $800 mln: report
SEOUL, Sept. 20 (Yonhap) -- The amount of interest on South Korean government bonds issued to fund a failed light-water reactor project in North Korea has snowballed to more than 900 billion won (US$798 million) over more than a decade, a government report showed Tuesday.
The Korean Peninsula Energy Development Organization (KEDO) -- an international consortium of South Korea, the U.S. and Japan -- launched the energy project to build two commercial reactors under a 1994 agreement between Pyongyang and Washington. The project was abandoned in late 2005 when it was about one-third finished because Washington suspected the communist state was running a secret uranium enrichment program, leaving no way for participants to retrieve their investments.
South Korea, which had agreed to shoulder 70 percent of the cost, has issued a total of 5.4 trillion won in government bonds from 1999 until this month to cover a 1.3 trillion won loan and interest from the delayed repayment, the Unification Ministry report said.
The accumulated interest is nearly 65.5 percent of the total amount, and it is likely to swell down the road if not paid off soon, the ministry said.
"Paying off the loan by issuing government bonds can weigh on the nation's fiscal soundness," said Rep. Hong Jung-wook of the Grand National Party, who released the report. "The government should seek ways to repay the loan, including using the inter-Korea cooperation fund."
The North conducted two nuclear tests in 2006 and 2009, and it revealed the existence of a uranium enrichment facility in November last year, adding urgency to international efforts to stop Pyongyang's nuclear weapons development.
The Korean Peninsula Energy Development Organization (KEDO) -- an international consortium of South Korea, the U.S. and Japan -- launched the energy project to build two commercial reactors under a 1994 agreement between Pyongyang and Washington. The project was abandoned in late 2005 when it was about one-third finished because Washington suspected the communist state was running a secret uranium enrichment program, leaving no way for participants to retrieve their investments.
South Korea, which had agreed to shoulder 70 percent of the cost, has issued a total of 5.4 trillion won in government bonds from 1999 until this month to cover a 1.3 trillion won loan and interest from the delayed repayment, the Unification Ministry report said.
The accumulated interest is nearly 65.5 percent of the total amount, and it is likely to swell down the road if not paid off soon, the ministry said.
"Paying off the loan by issuing government bonds can weigh on the nation's fiscal soundness," said Rep. Hong Jung-wook of the Grand National Party, who released the report. "The government should seek ways to repay the loan, including using the inter-Korea cooperation fund."
The North conducted two nuclear tests in 2006 and 2009, and it revealed the existence of a uranium enrichment facility in November last year, adding urgency to international efforts to stop Pyongyang's nuclear weapons development.
