Ukraine receives $100 million concessional loan for budget spending from South Korea

According to the Prime Minister of Ukraine, this money will be used to serve the social sector of Ukraine through supporting budget costs.

In April this year, Ukraine and South Korea signed an agreement that will allow Ukraine to receive up to $2.1 billion in concessional loans for the period 2024-2029. The loan has a term of 20 years with an annual interest rate of 1.0% and a grace period of 5 years.

In late October, Ukrainian Finance Minister Serhii Marchenko signed an agreement with the Export-Import Bank of Korea for a $100 million loan.

Ukraine faces a budget deficit of up to $35 billion by 2025, while the war with Russia is entering its third year with no end in sight. The country must rely on external financing to sustain its economy and war effort.

South Korea has provided humanitarian aid to Ukraine since the war between Russia and Ukraine broke out in 2021, but it has not provided lethal weapons because of a law prohibiting the direct supply of weapons to war zones.

On November 27, Ukrainian Defense Minister Rustem Umerov visited and met with South Korean President Yoon Suk Yeol. The visit took place in the context of the Russian military making the fastest progress in recent months.

Although the South Korean President said he did not rule out the possibility of providing weapons to Ukraine, there has been no official announcement to date indicating that Seoul has changed its stance, even after the visit of the Ukrainian delegation.

Experts told the Kiev Independent that South Korea could provide Ukraine with the most important support through ammunition supplies. The country not only has 155mm guns but also possesses about 3.4 million 105mm rounds compatible with some Ukrainian guns.

However, according to Yonhap news agency, a source from a South Korean government official shared that even if Ukraine requested to provide weapons, South Korea would only respond by expressing that it "will try to consider it."

Another South Korean official said that the provision of specific weapons systems would not be considered. Under the current situation, even if Ukraine made a request, whether to provide it or not would be considered incompletely.

The South Korean presidential office did not specify whether Ukrainian Defense Minister Rustem Umerov had requested weapons from South Korea during his recent visit to South Korea. In addition, the South Korean presidential office also refused to disclose details of the talks between the Ukrainian defense minister and the South Korean side in Seoul.

In response to reporters, the spokesperson of the South Korean Presidential Office stated that Seoul will continue to cooperate with both the Biden administration and the future administration of President-elect Donald Trump. Future decisions will be made by South Korea in close coordination with the US side.