The Export-Import Bank of Korea has agreed to loan the Cambodian government $56 million for the renovation of key highways in southern Cambodia.

Eximbank chairman and president Lee Duk-hoon met with Cambodian Finance Minister Aun Porn Moniroth on Thursday to ink the loan contract in the government complex in Phnom Penh.

The loan will be used to renovate Cambodia’s highways Nos. 2 and 22, which connect Phnom Penh and the southern border with Vietnam.

“The Cambodian state project aims at enhancing the country’s traffic infrastructure and providing greater convenience to the cross-border trade between Cambodia and Vietnam,” Eximbank said in a statement. 

The long-term, low-interest loan will be provided through the Korean state-run bank’s Economic Development Cooperation Fund, which is used for official economic assistance for developing countries.

“Cambodia is one of Korea’s crucial partners in economic cooperation,” the Eximbank chief said after signing the contract.

“Cambodia’s growth potential and passion for economic development are expected to create the best synergy with Korea’s own experience of economic growth,” he added.

Earlier in the day, Lee had a meeting with Cambodian Prime Minister Hun Sen.

Introducing Korea’s Saemaeul Movement, a nationwide grassroots movement to bring economic development to farming communities, the Korean bank chairman suggested that Cambodia set up a comprehensive development plan for Cambodian farmlands.

In addition to the loan to Cambodia, Eximbank is scheduled to sign another EDCF loan agreement with the Laotian government on Friday.

In his meeting with Laotian Finance Minister Lien Thikeo, Lee will sign a contract to lend $46 million won to construct irrigational infrastructure in the Laotian counties of Champhone and Songkhone in Savannakhet.

The operation is part of the Laotian “Three Pillar Policies,” a state-led movement to develop regional areas of the Southeast Asian nation.

The Eximbank chairman is scheduled to meet with Laotian Deputy Prime Minister Bounpone Bouttanavong the same day.

By Chung Joo-won (joowonc@heraldcorp.com)