SEOUL, Aug. 25 (Yonhap) — South Korea and Paraguay have signed an initial pact to cooperate in a US$500 million railway construction project in the Latin American country, the transport ministry said Tuesday.

The two countries signed a memorandum of understanding to collaborate in planning, finance, fundraising and selection of construction firms for the 44-kilometer railway to connect Paraguay’s capital city of Asuncion and Ypacarai near the capital city, according to the Ministry of Land, Infrastructure and Transport.

“The Korea Overseas Infrastructure & Urban Development Corp. (KIND) will conduct a feasibility study for the railway project. Such a partnership will increase the possibility of Korean builders winning the project,” a ministry official said.