South Korea announced on Tuesday plans to donate humanitarian aid worth 3 billion won (US$2.9 billion) to North Korea.

The South's Ministry of Unification, which handles relations in the Korean peninsula, told media that the government has decided to use the South-North Cooperation Fund to give humanitarian support to the North Korean people.

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According to a ministry official, the funds will finance civilian NGO projects geared towards providing assistance to the North's agriculture, healthcare and livestock industry. Financing for the projects will be allocated equally across the three sectors, specifically in providing infrastructure for plastic greenhouses and pediatric clinics and the dairy industry.

The planned donation will be the first time in four years that the South Korean government will dip into the cooperation fund since it imposed sanctions in the North after it blamed the North for the sinking of one of the Cheonan naval ship in 2010.

Following the Cheonan's sinking, Seoul had implemented the May 24th Measure which banned all trade with the North save for the Kaesong industrial complex and the occasional humanitarian assistance carried out by NGOs, according to Yonhap News.

Some observers speculate that the announcement may lead to the eventual lifting of the May 24th Measure, also fueled by South Korean President Park Geun Hye's announcement to establish a new presidential panel that work towards a peaceful Korean unification.

The ministry claimed that the 3 billion won (US$2.9 billion)aid should not be seen as a precedent to the lifting of the sanctions since the support it offers to Pyongyang - aimed to improve North Koreans' livelihoods - is still covered under the May 24th Measure.

Established in 1991, the South-North Cooperation Fund was established to foster inter-Korean relations in the economic sector and allow for an exchange in support for humanitarian aid.

TagsNorth Korea, Pyongyang, Seoul, Reunification, Korean peninsula, humanitarian aid, NGO, inter-Korea relations, relations in Korean peninsula, Korean unification