Ministry of Finance moves to speed up South Korean ODA pledges

Ministry of Finance moves to speed up South Korean ODA pledges

The Ministry of Finance is working with South Korean government representatives to resolve delays in official development assistance commitments for major infrastructure projects across Vietnam.

At a meeting at the Ministry of Finance (MoF) headquarters on May 20, general director of the Department of Debt Management and External Finance Nguyen Quoc Phuong and chief representative of KEXIM Bank in Vietnam Choi Wooyoung discussed solutions to shorten processing times and improve coordination.

The talks focused on the progress of capital commitments for proposed projects, appraisal delays, and KEXIM Bank’s future funding priorities. Both sides also agreed to propose holding a Vietnam-South Korea official development assistance (ODA) policy dialogue by late June.

Phuong noted that while the South Korean government has been a vital partner through the Economic Development Cooperation Fund (EDCF), which is South Korea’s primary concessional lending mechanism for developing economies, the preparation of new projects is currently facing obstacles.

The MoF has submitted notes requesting official pledges for several domestically approved projects, but has yet to receive a response.

These delays are affecting mid-term public investment plans for local authorities. Notable pending projects include a $32.45 million road connecting Tuyen Quang city to My Lam mineral spring, a $174 million project for three bridges on Route DT.827E in Tay Ninh province, and a $211 million coastal road linking Ben Tre, Tien Giang, and Tra Vinh.

Pointing to the $2 billion Economic Development Promotion Facility framework agreement signed for 2024 to 2030, Phuong expressed confidence in the comprehensive strategic partnership between the two nations to resolve current difficulties.

In response, Wooyoung explained that recent internal political changes in South Korea had caused some delays in lending policies and capital commitments.

For projects already approved by Vietnam, KEXIM Bank is currently reviewing pre-feasibility studies and will soon notify relevant agencies to proceed with the next steps. Choi also confirmed the bank would propose the policy dialogue to the South Korean Ministry of Economy and Finance to establish future funding directions.

The Export-Import Bank of Korea, known as KEXIM Bank, is a South Korean state-owned policy bank established to support overseas economic development and trade finance. Since the two countries established diplomatic ties in 1992, South Korea has channelled billions of dollars into Vietnamese infrastructure through the EDCF, covering transport, water supply, and urban development schemes.

VIR