North Korea owes a total of 3.5 trillion won ($3.11 billion) to South Korea, but strained inter-Korean relations make it uncertain whether Pyongyang will pay back the loan as scheduled.

According to South Korea’s Ministry of Unification, the South Korean government provided its northern neighbor with 1.37 trillion won in loans from 1998 to 2006 to support the construction of a light water reactor, as part of the Korean Peninsula Energy Development Organization (KEDO) project to curb North Korean nuclear ambitions. The maturity of the loan has not been clearly set, though.

From 2000 to 2007, Seoul offered 823 billion won worth of food aid, consisting of 2.4 million tons of rice and 200,000 tons of corn. The loan was designed to mature after 20 years with annual interest of 1 percent. The first-phase maturity of 6.7 billion won is due on June 7, and the multi-phased repayment will continue until 2037.

The South Korean government also lent 149.4 billion won to North Korea from 2002 to 2008 for equipment and materials used in building railways and roads.

Another 91.4 billion won went to the North from 2007 to 2008 for raw materials used in producing clothes, shoes and soap. North Korea paid back 3 percent of the money by providing 1,005 tons, with 88.7 billion won remaining.

Combining about 1 trillion won in interest, the total amount that Pyongyang owes Seoul reached 3.5 trillion won recently, the ministry said.

However, it is uncertain whether Pyongyang will fully repay the loan because there is no tool for pushing the regime to repay it. The contract only mentions about 2 percent in overdue interest.

A Unification Ministry official said it is too early to say that it will be difficult to retrieve the loan from North Korea.

By Kim Yoon-mi (yoonmi@heraldcorp.com)