Industry and Energy
Industry and energy is a central element in economic development and has contributed significantly to national growth. Therefore, the majority of developing countries assign industry and energy as central targets of aid to establish a foundation for the development of their economies.
The lack of basic infrastructure such as roads, railways and airports of developing countries increases the cost of goods. Compounding this are obstructions in economic productivity, including the lack of development in water resources and energy. These obstacles impede poverty eradication. Therefore, developing countries need to build basic infrastructure, water resource and energy facilities. However, these countries still lack finances, facilities and skills.
At the MDG summit in 2000 and the MDG+5 Summit in 2005, the UN emphasized the importance of industry and energy sector development aid. This includes support for the construction of infrastructure in developing countries. Furthermore, in order to eradicate poverty, the OECD/DAC, in the Guiding Principle on Using Infrastructure to Reduce Poverty, stressed the importance of industry and energy aid in eradicating poverty.
KOICA provides engineering aid in energy development, supply in the form of basic infrastructure construction (including transport, water resources and regional management) and electrical energy to support industry and energy sector development.
From 1991 to 2001, KOICA participated in over 150 efforts that provided a total of USD 200.57 million in industry and energy sector development. The amount of aid in the industry and energy sector has steadily increased after the inception on KOICA. In 1991 the amount of aid in this sector was USD 400,000. In 2004 it grew to over USD 10 million. Currently aid in this sector stands at USD 20 million to $30 million.
Since 2006, KOICA has modified the way in which it provides industry and energy sector aid, concentrating on project implementation through technical assistance in the form of consulting and development research. As a result, while the number of construction projects decreased from 9 and 11 in 2006 and 2007 respectively, to 9 and 5 in 2008 and 2009 respectively, the number of development research projects supported remained consistent at 10 and 11 in 2008 and 2009 respectively.
In 1991, the size of KOICA’s entire budget dedicated to the industry and energy sector grew from 0.07% to 2-5%. Since 2005, after being included as one of KOICA’s main seven sectors of aid, the size of industry and energy sector aid has gradually increased.
Meanwhile, the size of the industry and energy sector aid projects that KOICA participates in, such as the construction of roads, bridges, dams, power stations and airports has become too large for KOICA to manage alone. Therefore, KOICA is attempting to work in collaboration with the Korea Exim bank.
Korea International Cooperation Agency. 2011. 20 years of KOICA 1991-2010, Translated by Institute for Development and Human Security, Ewha Womans University. Seoul.