Background of the ERD Official Letter
Bangladesh's Economic Relations Division (ERD) is the core government body responsible for coordinating foreign aid and concessional lending. This official letter, sent by ERD to the Korean government through the Embassy of Bangladesh in Seoul, formally defines the government-to-government cooperation framework for the EIPP program. The letter sets out the priority project list, the scale of the requested loan package, technical assistance areas, and the follow-up process.
Seven Priority Projects
The seven priority projects listed in the ERD letter are divided into four economic zone infrastructure projects and three technical assistance initiatives. Each project was designed with EDCF loan eligibility in mind, and the Bangladeshi side's counterpart funding ratio is also specified.
| Type | Project | Scale | Funding | Bangladesh Counterpart | Period |
|---|---|---|---|---|---|
| Infrastructure | Mirsarai power infrastructure | $120M | EDCF | 20% | 4 years |
| Infrastructure | Araihazar ICT infrastructure | $65M | EDCF | 15% | 3 years |
| Infrastructure | Mongla port hinterland road | $85M | EDCF | 20% | 3 years |
| Infrastructure | Rajshahi water supply | $30M | EDCF | 25% | 2 years |
| Technical Assistance | Extension of KDI policy consulting | $15M | KOICA | 10% | 3 years |
| Technical Assistance | Technical manpower training center | $20M | KOICA | 15% | 3 years |
| Technical Assistance | Investment promotion system | $15M | EDCF | 10% | 2 years |
EDCF Loan Structure
EDCF (Economic Development Cooperation Fund) loans are concessional loans managed by the Export-Import Bank of Korea, typically offered on highly favorable terms such as interest rates of 0.01% to 0.2% and maturities of 40 years with a 15-year grace period. The ERD letter requests a comprehensive loan package worth $350 million and proposes project-by-project phased disbursement.
Diplomatic Procedures and Follow-Up Actions
After the ERD letter, the standard sequence is EDCF screening by Korea's Ministry of Economy and Finance, a pre-feasibility study by the Export-Import Bank of Korea, signing of an intergovernmental loan agreement, and then project launch. It generally takes 12 to 18 months from the initial letter to the formal loan agreement, and Korean firms need to prepare for project participation during this period.