Gov’t to support more eco-projects in Asia

October 07, 2009

The government has announced it will provide 7 trillion won ($5.98 billion) in loans to developing countries over the next four years, which it hopes will bolster the nation’s green growth initiatives.

The Ministry of Strategy and Finance said it has set aside 1.7 trillion won at the Economic Development Cooperation Fund for loans to support green growth projects in developing countries between this year and 2012.

Local banks, including the Export-Import Bank of Korea, will be asked to participate in the project by providing the remaining 5.3 trillion won, the ministry said.

The EDCF is a low-interest, long-term aid loan the ministry has provided to developing countries for the past two decades.

The ministry earmarked 1.3 trillion won for activities taking place in this year alone.The aid money will be used primarily for sewer systems, waste disposal and biotechnology, the ministry said.

Also under consideration are zero-interest loans to low-income countries for projects to develop alternative energy sources such as solar energy and wind power, the ministry said.

The main beneficiaries of the loans will be developing countries in Asia, the ministry said, because of the high amount of carbon emissions produced by countries in the region.“Asia produces more carbon dioxide than other continents, so we want to help reduce carbon emissions from Asia,” said Cho Won-kyung, the ministry’s senior deputy director.

According to data from the Organization for Economic Cooperation and Development, Asian countries produce more than a third of annual global carbon emissions, with China, India, Japan, Indonesia leading the pack. “We hope such efforts will enhance Korea’s image as green growth leader,” Cho said.

A portion of the aid money will support an ongoing development project along the Mekong River, the ministry said.In 1992, the Asian Development Bank initiated the Greater Mekong Subregion project to develop the six Asian countries that the river runs through - China, Thailand, Myanmar, Laos, Vietnam and Cambodia.

Other countries in addition to the six Mekong region countries have participated in the project, including Korea, Japan and the United States.In particular, Korea has provided $11.0 billion in loans for the project, which the ministry said is much lower than the amount of financial support from Japan, the U.S. and China.

By Moon Gwang-lip [joe@joongang.co.kr]