South Korean Government provides EDCF loans to developing countries
SOC support projects carry low project risk
Hyundai Corporation targets EDCF as a new growth engine, expanding roles into design, planning, and operations
Domestic general trading companies, feeling the limitations of their traditional trading-oriented profit models, are aggressively entering the Economic Development Cooperation Fund (EDCF) business. As these projects are linked to government guarantees, they allow companies to reduce risk while securing stable profits, emerging as a key “post-trading” solution.
According to industry sources on the 2nd, Hyundai Corporation has successfully secured a contract worth KRW 99.8 billion to supply regional medical equipment for the Ministry of Health of Uzbekistan, as well as a KRW 118.2 billion project to build a national hospital for the Ministry of Health of Laos. This achievement comes only a year and a half after the company first entered the EDCF sector.
The EDCF is a structure where the South Korean government provides long-term, low-interest loans to developing countries, which then use those funds to launch projects in sectors such as infrastructure and healthcare. Since the South Korean government provides the loans, foreign companies are restricted from bidding on these projects.
The background of Hyundai Corporation selecting EDCF as a new business venture lies in the structural factor of slowing profitability in its core trading-centered operations. This sector is considered an area where trading companies can excel, as they can fully utilize their specialized business know-how gained from overseas operations.
Other major trading firms have already identified EDCF as a future revenue source. Samsung C&T’s Trading & Investment Group won a KRW 70 billion project to establish a land information system in Tunisia last May. POSCO International also resumed its review of entering Official Development Assistance (ODA) projects early last year and is currently participating in bids for four to five overseas infrastructure projects.
July 2, 2025
Maeil Business Newspaper