South Korea will commit 9 trillion won ($6.05 billion) to the Economic Development Cooperation Fund through 2028, cutting its overall three-year plan while broadening support into policy priority sectors such as AI, digital technology, culture, green energy and supply chains.
Unveiling a new three-year roadmap on Monday, the government said it wants to shift EDCF from a traditional official development assistance vehicle toward a more strategic development finance tool that can help Korean companies expand overseas and deepen supply chain links.
Speaking at an EDCF management committee meeting in Seoul, Deputy Prime Minister and Finance Minister Koo Yun-cheol said the reset reflects a broader global pullback in overseas development spending.
"Major donor countries are strengthening the link between official development assistance and their economic and security interests while, overall, reducing the supply of development finance," Koo said.
"Korea too will operate the EDCF in a way that contributes to mutually beneficial growth with recipient countries based on public trust."
The plan marks a 35 percent reduction from the 14.1 trillion won allocated under the 2025-2027 midterm program, reflecting a more selective approach as geopolitical tensions deepen and fiscal conservatism spreads globally.
But the narrower envelope comes with a wider strategic lens. Rather than concentrating on large-scale infrastructure and construction, the government is steering more of the fund toward sectors where Korean industrial strengths overlap with rising demand in developing economies.
That includes so-called signature projects that apply Korean technology to artificial intelligence-based public infrastructure, as the government plans to expand AI-enabled projects to improve the efficiency of roads, power grids and medical systems. In culture, it aims to support large-scale projects with symbolic value and stronger spillover effects for the globalization of Korean content.
Korea launched the EDCF in 1987 to support economic and social infrastructure projects in emerging economies through long-term, low-interest loans aimed at fostering growth in recipient countries.
jwc@heraldcorp.com
