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Development Overview
Official Aid Economic Infrastructure

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Economic Infrastructure

EDCF Loans: Distribution by Transportation and storage

1. Transport & storage

1.1. Characteristics
The transport & storage sector represents the largest support sector for EDCF assistance. The accumulated amount of EDCF loan commitments to this sector is KRW 923 billion, accounting for 29.0% of the EDCF’s total loan commitments. In terms of disbursement, the sector outranked the rest with KRW 475 billion, accounting for 26.8% of total disbursements.

 In this sector, the EDCF mainly financed projects involving road construction, procurement of trains, and other transport infrastructures. The majority of road construction projects are development projects and the project scope includes detailed design, construction, and supervision. Establishing an effective and efficient road network linking the cities is essential in order for the government to effectively allocate its resources. Having put much emphasis on road construction, the EDCF strongly believes that assistance in this sector significently contributed to the establishment of sound and strong economic infrastructure for its partner countries.

The EDCF also sponsored 8 railway projects providing locomotives and passenger trains. These projects were equipment loan projects replacing old trains with new ones. Other transport projects included building airports, ports, and access roads to project sites.

Road
Road construction projects include building new roads, repairing old roads, and procuring construction equipments. The EDCF has so far financed 25 road projects amounting to KRW 513 billion, which represents 55.6% of total transport & storage projects.

Railway
The EDCF’s support for railways amounted to KRW 249 billion, which is 27.0% of its total support for transport & storage projects.
Those projects were mainly equipment projects modernizing trains.

Assistance Volume
Since 2003, EDCF loan commitments to the transport & storage sector have stayed at a stable level of 28.0%. During 2007, however, the total commitment amount reached KRW 214 billion, representing 38.5% of the EDCF’s total loan commitments in the same year, topping the rest of the support sectors.

Because economic infrastructures like roads, railways, and trains are essential to the development of any nation, a large share of EDCF commitments is being constantly concentrated into this sector. Most underdeveloped partner countries lack the necessary transport networks, and even those that are equipped with the infrastructure need repair works in many cases.

The average commitment amount in the transport sector accounts for about 28% of the EDCF’s total yearly volume in recent years and the average disbursement amount in this area is similar, outranking all other support sectors.

In light of the current trend of EDCF-financed projects, the disbursement portion of this sector is expected to record approximately 30% every year, for the next 5 years at a minimum.

1.2. Prospects
Other sectors, such as water supply & sanitation and health, may have more visible and immediate impact on improving the people’s quality of life compared to the transport & storage sector. For governments envisioning mid and long-term development plans, however, the transport sector is also critical as it allows the efficient allocation of national resources.

Ralnapura-Bandawela Road ehabilitation Project, Sri Lanka
[Picture 1-1] Ralnapura-Bandawela Road ehabilitation Project, Sri Lanka

As many partner countries regard the transport & storage sector as their development priority, the EDCF expects to maintain the current support volume in this sector for the next several years

[Table  1-2] EDCF Projects in the Transport & Storage Sector (As of 2007)
EDCF Projects in the Transport & Storage Sector (As of 2007)

Source: The Export-Import Bank of Korea. 2008. EDCF Your development partner 1987-2007, History book. Seoul.