Ukraine secures another benefactor

South Korea has signed a framework agreement on economic cooperation with Kiev, including $2.1 billion in low-interest loans

South Korea has followed through on its pledge to provide more aid to Ukraine, signing a framework agreement that clears the way to give Kiev $2.1 billion in low-interest loans to help shore up its finances. 

South Korean Finance Minister Choi Sang-mok and his Ukrainian counterpart, Sergey Marchenko, signed the deal on Friday in Washington, where both men had traveled to attend G7, IMF and World Bank meetings. Seoul previously gave Ukraine $200 million in humanitarian aid amid its conflict with Russia and promised to provide an additional $2.1 billion through long-term loans.

“Friday’s agreement was meant to lay the legal foundation on credit assistance,” the South Korean Finance Ministry said on Sunday in a statement. “The two sides agreed to explore projects together that help Ukraine’s reconstruction and development.”

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The deal comes at a time when Russian forces are making battlefield gains and Ukraine’s cash-strapped government is struggling to ramp up weapons production. Marchenko told G7 finance ministers that although Ukraine’s government has made progress in boosting its revenue and borrowing money domestically, “internal measures have only limited effect.” He added, “Ukraine’s financial needs in the conditions of full-scale war are significant, and international support continues to be vital.”

South Korea has faced pressure from the US and other Western allies to boost its support for Ukraine, but it has sought to avoid raising tensions with Russia. Although Seoul has maintained an official policy of providing only non-lethal aid to Kiev – the country has a law against sending weapons to war zones – President Yoon Suk-yeol’s administration reportedly agreed to transfer over 300,000 artillery shells to Ukraine last year.

The framework agreement with Ukraine calls for South Korea to start providing low-interest loans in 2025. US lawmakers passed a long-stalled Ukraine aid bill on Saturday. House Speaker Mike Johnson won more support for the legislation by reclassifying some of the nearly $61 billion that will be given to Kiev as loans that will supposedly be paid back at some point.

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