Ukraine has received $100 million as part of a loan from South Korea for budget assistance, the first time the country is providing aid to Ukraine's state budget, Prime Minister Denys Shmyhal said on Nov. 29.
According to Shmyhal, the funds will be devoted to Ukraine's social sector by supporting budget expenses.
In April of this year, Kyiv and Seoul signed an agreement enabling Ukraine to attract up to $2.1 billion in concessional loans over 2024-2029. The loan has a term of 20 years with an annual interest rate 1.0% and a five-year grace period.
Later in October, Ukrainian Finance Minister Serhii Marchenko signed a loan agreement with the Export-Import Bank of Korea to attract the $100 million loan.
Ukraine faces a $35 billion budget deficit in 2025, and with Russia’s war continuing into its third year with no end in sight, the country has to rely on external financing to sustain its economy and war effort.
South Korea has provided Ukraine with humanitarian aid throughout Russia's full-scale war but not with lethal assistance, as the country's legislation prevents direct arms supplies to war zones.
Defense Minister Rustem Umerov on Nov. 27 visited South Korea and met with the country's President Yoon Suk Yeol as Russian forces make their fastest gains in months and thousands of North Korean troops are stationed in Russia's Kursk Oblast.
Although the South Korean president did not rule out supplying arms to Ukraine, there were no official announcements that Seoul had changed its stance after the visit of the Ukrainian delegation.
Experts told the Kyiv Independent that South Korea could provide the most significant support to Ukraine through ammunition supplies. The country fields not only 155 mm artillery but also stores 3.4 million 105 mm rounds compatible with some of Ukraine's guns.
A South Korean official recently said that direct supplies of 155 mm ammunition are not on the table.
Chris York
(Updated: )
