KOREA - SECOND FEASIBILITY STUDIES LOAN

LOAN, TO BE ADMINISTERED BY THE ECONOMIC PLANNING BOARD (EPB) OF THE ROKG, WILL ASSIST ROKG IN DETERMINING PROJECTS AND RESOURCES TO WHICH INVESTMENT RESOURCES WILL BE COMMITTED UNDER THE THIRD FIVE-YEAR PLAN (TFYP). TFYP CALLS FOR DEVELOPMENT OF RURAL ECONOMY, INCREASES IN EXPORTS, AND ESTABLISHMENT OF CHEMICAL AND HEAVY INDUSTRIES. SPECIFIC GOALS INCLUDE: SELF-SUFFICIENCY IN MAJOR FOOD GRAINS; IMPROVED AND EXPANDED HEALTH AND CULTURAL FACILITIES; ADDITIONAL RURAL ELECTRIFICATION AND ROADBUILDING; BALANCED DEVELOPMENT OF SUCH SERVICES AS TRANSPORTATION, COMMUNICATIONS, STORAGE, AND CARGO HANDLING; IMPROVED HOUSING AND SANITATION; AND DEVELOPMENT OF FOUR MAJOR RIVER BASIN AREAS. WITHIN THE CONTEXT OF THESE ACTIVITIES, TFYP CALLS FOR A GROSS INVESTMENT OF 4,525 BILLION WON (US $12.2 BILLION), AN INCREASE OF 51% OVER THE SECOND FIVE YEAR PLAN, WITH 80% OF THE INVESTMENT COMING FROM PRIVATE SOURCES. SPECIFIC AREAS TO BE STUDIED HAVE NOT BEEN DETERMINED. ROKG, THROUGH EPB, WILL ADVISE AID OF SPECIFIC STUDIES FOR WHICH FINANCING IS NEEDED AND WILL SOLICIT AID APPROVAL OF BOTH PROPOSED STUDY AND SCOPE OF WORK. BULK OF SUPPORT WILL BE FOR PREFEASIBILITY, FEASIBILITY, SECTORAL AND MARKETING STUDIES RELATING DIRECTLY TO PROPOSED CAPITAL PROJECTS. FINANCING OF FINAL DESIGN PROJECTS WILL NOT BE EXCLUDED; FEASIBILITY FOR SUCH PROJECTS, HOWEVER, MUST ALREADY HAVE BEEN DETERMINED, AND ARRANGEMENTS FOR IMPLEMENTATION FINANCING MUST BE REASONABLY FIRM.