ISLAMABAD (APP) - Pakistan and Korea here on Thursday signed two loan agreements worth US $ 205 million under Economic Development Cooperation Fund (EDCF). The agreements were signed by Secretary Economic Affairs Division, Farrakh Qayyum and Korean Ambassador to Pakistan, Shin Un on behalf of their respective governments while State Minister for Economic Affairs, Hina Rabbani Khar, witnessed the signing ceremony. The first agreement was in connection with Framework Arrangement between the two governments concerning loans from EDCF for the year 2008-2011. Under this agreement, Pakistan would be entitled to avail opportunity of EDCF loan from Korea up to US $ 160 million at the interest rate of 0.1 percent with repayment period of 35 years including grace period of 10 years. Under the other agreement, Korea would provide Pakistan US$ 45 million EDCF loan concerning Gujranwala Electric Power Company (GEPCO) substations for Rural Distribution Construction Project. The loan would be utilized to design, procurement and installation of equipments with the technical assistance from Korea for the construction of sever 132/11 KV sub-stations in GEPCO region. Speaking on the occasion, Hina Rubbani Khar said that at this time of economic hardship and energy shortage, Korea has come forward and stands with Pakistan to soften the situation and further strengthen the bilateral economic cooperation between the two countries. She expressed the hope that the agreement signed for the development of power sector would help reduce the power crisis. Korean ambassador, in his comments, expressed the hope that the agreements would help further enhance bilateral economic cooperation between the two countries. It may be recalled that Korean government had established EDCF in June 1987 for promoting Korea's economic cooperation with developing countries. The EDCF assists developing countries by providing necessary funding to assist in industrial development and economic stability. The Exim Bank of Korea is responsible for the operation of the EDCF including project appraisal, execution of the loan agreement and evaluation after project completion.