South Korea Unveils $5.6b Financial Package for Africa

By Modupe Gbadeyanka

The Republic of Korea (South Korea) has announced a total funding package of $5.6 billion for Africa, which would be delivered over two years through partnerships with various development agencies, including but not limited to the African Development Bank (AfDB) Group.

From the amount, $600 million would be earmarked for the energy sector.

The Korean government made this known at the conclusion of the Ministerial Roundtable of the Korea-Africa Economic Cooperation (KOAFEC) Conference held at AfDB’s 53rd Annual Meetings.

The Ministerial Roundtable is the signature event of the biennial KOAFEC Conference, gathering a peer group of African Ministers of Finance who also serve as the AfDB Board of Governors to discuss topical issues and a pan-African approach to engagement with Korea.

Taking place under the theme “Africa and the 4th Industrial Revolution: Opportunities for leapfrogging?”, the Ministerial Conference highlighted the need for long-term planning for industrial development and execution of projects, as well as a focus on value addition in sectors where Africa has comparative advantage for example in agriculture and natural resources.

It was gathered that the $5-billion financial assistance package leverages resources from various Korean bilateral agencies and platforms, including the Knowledge Sharing Program, the Economic Development Cooperation Fund, Korea Import-Export Bank, among others.

Specifically, AfDB President, Mr Akinwumi Adesina, and the Deputy Prime Minister of Korea, Mr Dong Yeon Kim, signed three cooperation agreements for the implementation of certain components of the $5-billion package by the Bank Group.

The first was the extension of the General Cooperation Agreement which allowed for the replenishment of the KOAFEC Trust Fund housed at the AfDB with $18 million.

The Trust Fund, now totalling $93 million, will continue to provide critical capacity building grants and resources for project feasibility studies. An Action Plan of 20 KOAFEC projects were endorsed during the Conference for 2019-2020 destined for a diverse group of countries and sectors.