South Korea Approves $170 Million Loan for AI and Digital Training Institute in Tanzania

South Korea has approved a $170 million Economic Development Cooperation Fund (EDCF) loan to support the establishment of an AI and digital technology training institute in Tanzania.

The Ministry of Finance and Economy convened the 159th EDCF Management Committee, chaired by the Minister of Finance and Economy, in writing and approved the Tanzanian project alongside amendments to regulations governing the operation and management of the EDCF.

The planned institute will offer four programmes covering artificial intelligence (AI), robotics, data analytics and the Internet of Things (IoT), with the aim of developing skilled professionals for Tanzania’s growing AI and digital industries.

The project will include the construction of educational facilities and a campus, as well as the provision of AI training and hands-on learning equipment. This will include AI laboratories, IoT devices, robotics equipment, drones and 3D printers. The project will also cover ICT and network systems, curriculum development, and operational and maintenance support.

Korean AI technologies and education models will be applied to the development of AI laboratories and high-performance AI training facilities within the institute, as well as to institutional operations and capacity building for education personnel.

The project will be financed through a tied EDCF loan, meaning procurement will be limited to Korean companies. According to the Ministry of Finance and Economy, this structure is expected to create opportunities for Korean companies in AI, education technology, construction and related sectors to expand into the African market.

The ministry said Tanzania is also planning follow-up projects, including additional training institutes modelled on the new facility and a large-scale data centre. The successful implementation of the project could therefore create further overseas business opportunities for Korean companies.

Tanzania is pursuing the development of its AI and digital industries under its national development strategy, Vision 2050, which targets raising GDP per capita to $7,000 by 2050. The new institute is expected to train highly skilled professionals who can contribute to the country’s industrial development and economic transformation.

The Korean government plans to support the institute’s launch and sustainable operation by linking the EDCF loan with other initiatives, including the Knowledge Sharing Program (KSP), the Global AI Hub and multilateral development bank (MDB) trust funds.

The Ministry of Finance and Economy also said it plans to approve large-scale EDCF projects worth $100 million or more only after deliberation and resolution by the EDCF Management Committee, with participation from relevant government ministries. The government also intends to expand the involvement of private-sector experts throughout project implementation.

In line with this approach, Second Vice Minister Huh Chang held discussions with private-sector experts in development cooperation and AI to gather their views and recommendations on ensuring the successful establishment and effective operation of the Tanzanian institute.

The government has also revised relevant regulations to improve the transparency and fairness of EDCF projects while facilitating implementation of the K-AI Package. The revisions establish a basis for the Korean government to propose projects to developing country governments after gathering input from relevant ministries, while setting out which feasibility studies require approval and the criteria for such approval.

The government further strengthened the EDCF framework by requiring an annual review of the appropriateness of the EDCF interest rate structure and the implementation of necessary measures.

Following the approval, the Korean government plans to accelerate efforts to identify new projects under the K-AI Package and continue strengthening the transparency and fairness of EDCF operations through greater participation from private-sector experts and relevant government ministries.