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Taiwanese banks to fund OCD overseas infrastructure aid projects

2017/10/16 19:18:25

Taipei, Oct. 16 (CNA) A US$3.5 billion loan fund from Taiwan's Official Development Assistance (ODA) program aimed at helping countries covered by the government's New Southbound Policy with infrastructure and major development projects will come from Taiwanese commercial banks rather than from the government coffers, Cabinet spokesman Hsu Kuo-yung (徐國勇) said Monday.

The US$3.5 billion ODA disbursement program has nothing to do with foreign aid but involves loans to be extended by Taiwanese commercial banks to foreign governments for collaborative projects undertaken by Taiwanese companies, Hsu said in a press release.

The ODA loan program is unrelated to government budget, Hsu went on, adding that the government will only subsidize loan takers to cover interest payments.

Saying that Taiwan plays a key role in regional and international development, Hsu continued that expanding Taiwan's participation in foreign infrastructure projects through joint efforts by the public and private sectors will not only help improve relations with other countries but will also help increase Taiwanese industry awareness and help them explore business opportunities in the global market.

Hsu said it is common for the governments of many countries to extend support for their industries to explore overseas business opportunities.

For instance, Japan and South Korea have made good use of the ODA mechanism to help their industries explore opportunities in developing countries, Hsu said.

Japan's ODA disbursements from 2000 to 2014 reached between US$150-US$160 billion, or US$10 billion per year on average, while South Korea's disbursements from 2011 to 2017 amounted to US$14 billion, or US$2 billion per year on average.

By taking these two countries' ODA operational mechanisms as references and taking Taiwan's situation into account, the Executive Yuan is promoting the ODA loan program with the aim of increasing Taiwan's participation in overseas public infrastructure projects, with the US$3.5 billion in bank loans to be extended initially for the program, according to Hsu.

Hsu said the source and destination of money under the ODA mechanism will be made transparent to avoid potential fraudulent activity, including money-laundering.

(By Hsieh Chia-chen and Evelyn Kao)
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