Export-Import Bank of Korea President Yoon Hee-sung, left, poses with Uzbek Minister of Investment, Industry and Trade Laziz Kudratov after signing an agreement to provide loan for Uzbekistan's high-speed railway project through Korea's Economic Development Cooperation Fund. Applauding in the background are President Yoon Suk Yeol and Uzbek President Shavkat Mirziyoyev. Yonhap

The Export-Import Bank of Korea (Eximbank) signed an agreement with the government of Uzbekistan to provide a loan through Korea's Economic Development Cooperation Fund (EDCF), the bank announced Monday.

According to Eximbank, its president Yoon Hee-sung met with Uzbek Minister of Investment, Industry and Trade Laziz Kudratov to sign the loan provision agreement following the summit between the leaders of the two countries in Tashkent, Uzbekistan, Friday (local time). President Yoon Suk Yeol and Uzbekistan's President Shavkat Mirziyoyev accompanied the signing.

The loan will fund a total of 185.19 million euros ($198.12 million) to support Uzbekistan's project to purchase Korean high-speed railway vehicles. The loan will be provided through the EDCF, which was established by the Korean government in 1987 to promote economic exchanges with other countries. Assigned by the Ministry of Economy and Finance, Eximbank operates and manages the fund to provide long-term concessional loans for industrial development and economic stability in developing countries.

As a double-landlocked country — or a country surrounded by other landlocked countries — Uzbekistan relies primarily on roads for transportation. Due to aging railway infrastructure, however, it takes 16 hours to travel between the country's east and west regions, leading to problems such as air pollution and widening regional income gaps.

The country thus expects that the adoption of Korean-style high-speed railway vehicles — which have motors distributed to each car and are known for being eco-friendly — to dramatically improve accessibility between its capital Tashkent and western regions of the country, greatly contributing to balanced regional development.

"The project is all the more meaningful as we will be supporting the first export of Korean-style distributed-power high-speed rolling stock, which is the world's fourth to be developed," the Eximbank president said.

"EDCF will be a stepping stone for Korean firms to enter the global market, diversifying economic cooperation between Korea and Uzbekistan."

He also signed loan provision agreements for projects supplying science, technology and ICT education equipment to secondary schools and establishing a pharmaceutical cluster. Eximbank and Uzbek Industrial and Construction Bank (Uzpromstroybank) also signed a contract to increase the existing credit limit from $30 million to $50 million on the same day.