EDCF Dept'

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EDCF Loan Procedures
2003. 10 EDCF Dept.
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Contents
EDCF Loan Procedures
1. PROJECT CYCLE 2. LOAN
PROCESSING 3. IMPLEMENTATION 4.
POST EVALUATION
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1. PROJECT CYCLE
1.1. Flow Diagram
Identification
Preparation
Post Evaluation
Appraisal
Implementation
Loan Agreement
Determination of Govts Assistance
Govts Agreement Arrangement
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1. PROJECT CYCLE
1.2. Major Party concerned with Each Stage

• Project Identification Preparation
• Project Appraisal
• Determination of Govts Assistance
• Govts Agreement Arrangement
• Loan Agreement
• Project Implemention
• Postevaluation

Prospective Recipient Country KEXIM MOFE of
Korean Govt. MOFA of Korean Govt. Recipient
Govt. Borrower KEXIM Borrower EA KEXIM
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2. LOAN PROCESSING
2.1. Development Project Identification

• By the Prospective Recipient Government
• A project is predominantly identified by the
  prospective recipient government in the course of
  preparing a development plan or sector
  development program
• By Bilateral Annual Consultation with the
  Prospective Recipient Govts
• Bilateral Consultation is getting executed to
  facilitate and promote development project
  identification activities, with EDCFs initiative

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2. LOAN PROCESSING
2.2. Project Preparation

• Justifying the Project Feasibility (1)
• An identified project takes real form through a
  feasibility study
• Feasibility Study should be based on a thorough
  and extensive survey carried out under
  internationally accepted standards, and justify
  the following key issues
• Technical Feasibility
• Economic Viability and
• Financial Soundness of a Project

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2. LOAN PROCESSING
2.2. Project Preparation

• Justifying the Project Feasibility (2)
• In case the recipient government could not field
  Feasibility Study due to any constraints such as
  budget deficit and so on,
• Korean government may provide grant aid for it
  through Korea International Cooperation Agency
  (KOICA), or TA Loan through EDCF
• KOICA a government agency for bilateral grant
  aid to developing countries

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2. LOAN PROCESSING
2.2. Project Preparation

• Making Loan Request (1)
• Prospective recipient government, having studied
  the Project Feasibility, makes an official loan
  request to the Korean Government through Korean
  embassy in its own country
• Documents concerned
• Proposal EDCF Loan
• Feasibility Study Report and
• Other supporting documents

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2. LOAN PROCESSING
2.2. Project Preparation

• Making Loan Request (2)
• Major issues to be covered in Loan Request
• Priority accorded to the project
• Financial plan to cover the project cost
  estimates, including arrangement to obtain
  insufficient funds, if any, in addition to the
  EDCF loan
• Details of items to be financed by the EDCF loan
• Organizational arrangement for implementing the
  project
• Procurement plan under the EDCF loan and
• Schedule for employment of consultants, where
  necessary

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2. LOAN PROCESSING
2.3. Project Appraisal

• Preliminary Appraisal
• MOFE of the Korean government makes a
  preliminary decision on the suitability of
  extending EDCF loans to the proposed project
  based on the review by EXIM Korea
• Major issues to be reviewed
• Project contribution to the industrial
  development or economic stabilization of the
  recipient country
• Project Feasibility and
• Non Commercial Viability

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2. LOAN PROCESSING
2.3. Project Appraisal

• Main Appraisal (Appraisal Mission)
• If the proposed project is regarded suitable,
  MOFE of the Korean government then requests EXIM
  Korea to field a appraisal mission to conduct
  field research
• Main purpose of appraisal mission
• To evaluate Project Feasibility
• To review Status of Project Preparation
• To negotiate Terms and Conditions of the Loan
• To survey Project Siteand
• To discuss Schedule for Further Processing

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2. LOAN PROCESSING
2.4. Determination of Governments Assistance

• Final Decision on the Proposed Project
• MOFE makes a final decision on extending
  assistance to the proposed project, taking into
  consideration the appraisal report of KEXIM and
  the opinions of relevant ministries
• The result of the final decision of MOFE is
  notified to MOFA

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2. LOAN PROCESSING
2.5. Governments Agreement Arrangement

• MOFA informs the recipient country of Koreas
  willingness to extend a loan, the total amount of
  the loan and so on, by a Pledge
• Governments Agreement
• To be made between the Korean government and the
  recipient government
• Introducing the basic framework of the EDCF loan
  and describing their responsibility
• Effective Period at least 10 years once signed
  by both party

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2. LOAN PROCESSING
2.5. Governments Agreement Arrangement

• Governments Arrangement
• To be made between the Korean government and the
  recipient government
• For the individual project, stating the basic
  financing terms and conditions
• Another Arrangement needs to be signed for any
  new EDCF loan as long as the Agreement is in
  force
• Effective Period 18 months after the effective
  date of Loan Agreement in case of not entering
  into a supply contract

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2. LOAN PROCESSING
2.6. Loan Agreement

• Loan Negotiation
• To be made between the Borrower and KEXIM
• For the specific terms and conditions such as
  following
• Use of Proceeds of Loan including Loan
  Allocation
• Procurement Procedures
• Disbursement Procedures
• Particular Covenants and so on

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2. LOAN PROCESSING
2.6. Loan Agreement

• Effectiveness Termination
• To be effective after the following are received
  by KEXIM
• Legal opinion prepared by the Minister of Justice
  or other competent person
• Evidence of Authority and so on
• To be terminated according to the termination of
  Governments Arrangement due to not entering into
  a supply contract within 18 months after the
  effective date of Loan Agreement

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3. IMPLEMENTATION
3.1. Procurement

• The Guidelines for Procurement under the EDCF
  Loan
• To be procured from Eligible Source Countries, as
  agreed upon
• Procurement methods acceptable to KEXIM
• Limited International Bidding
• International Shopping and
• Direct Contracting
• KEXIMs concurrence to be obtained on bidding
  documents, proposal for award, contracts
  concluded, and so on

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3. IMPLEMENTATION
3.2. Employment of Consultants

• The Guidelines for Employment of Consultants
  under EDCF Loan
• Competent and impartial Consultants to be
  selected
• Proposal for the consultant services to be
  evaluated on the following basis
• General experience and performance record of the
  firms and their staffs to be assigned to the
  work and
• Adequacy of the proposed approach, methodology
  and work plan
• KEXIMs concurrence to be obtained on Terms of
  Reference, Short List of Consultants, proposal
  for award, contracts concluded, and so on

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3. IMPLEMENTATION
3.3. Disbursement

• Disbursement Procedures under EDCF Loan
• To be made as the progress of the project renders
  it necessary, up to the Loan Amount, and on or
  before Loan Closing Date as agreed on in the Loan
  Agreement
• Disbursement Procedures acceptable to KEXIM
• Commitment Procedure
• Reimbursement Procedure and
• Direct Payment Procedure

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4. POST EVALUATION

• Main Purpose
• To feed back lessons learned from the project
  into future projects
• Postevaluation Mission
• To be undertaken at an appropriate interval after
  PCR prepared
• To identify lessons through reviewing the
  following
• The preparation, design, appraisal, and
  implementation aspects of the project
• The cost and benefits and
• The outcome of the project relating to its
  initial objectives

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The End THANK YOU VERY MUCH