Export-Import Bank of Korea will extend loans for several development projects pushed by the Vietnamese government.

The loans totaling $58 million will be offered to Vietnam via the Economic Development Cooperation Fund, set up by the Korean government in 1987, according to the state-run bank.

Korea Eximbank chairman and president Kim Yong-hwan signed a memorandum of understanding with Vietnamese Finance Minister Vuong Dinh Hue on the development funds in Seoul on Thursday.

“The projects include providing electric power to 55 mountain villages in the country by establishing solar cells,” an Eximbank spokesman said in a statement.

As all details the project is undertaken by Korean enterprises, the project will likely be a stepping-stone for local companies’ looking to making inroads into the Southeast Asian market, he said.

Another one is sewage disposal project in Long Xuyen City, aimed at preventing disease by minimizing environmental pollution.

This year marks the 20th anniversary of the diplomatic ties between South Korea and Vietnam. And the two sides plan to expand economic cooperation.

In a similar vein, the two countries signed an MOU on collaboration on insurance regulations on the same day.

Finance Minister Vuong Dinh Hue paid a visit to the Financial Services Commission in Yeoui-do, Seoul.

Korea’s financial aid to underdeveloped and developing countries has surpassed $1 billion per annum.

The yearly amount of “official development assistance” has reached $1.17 billion, according to the state-run bank.

This is equivalent to each Korean offered an average of 27,730 won to underdeveloped and developing countries.

By nation, Vietnam topped the list with percentage of 10.6 percent of Korea’s total assistance. Other major targets included Cambodia, Afghanistan, Bangladesh and Sri Lanka.

Over the past few years, Korea Eximbank continued to increase its provision of economic development and cooperation funds to promote economic cooperation with emerging nations.

The funds, provided at a minimum interest rate of 1 percent, are mainly used for the construction of industrial and residential infrastructure in the developing world.

By Kim Yon-se (kys@heraldcorp.com)