A Loan Agreement between the Republic of Benin and the Kuwait Fund for Arab Economic Development has been signed in Cotonou, whereby Kuwait Fund extends a Loan in an amount of 5 million Kuwaiti Dinars, equivalent to about $17m, to participate in the financing of the Water Supply in Three Cities Project.
It is worth mentioning that the Fund is a Kuwaiti public corporation, which relies entirely on its own resources for making loans and providing other kinds of development assistance.
The Loan Agreement was signed by His Excellency Excellency Mr. RomualdWadagni – minister of economy and finance of the Republic of Benin, on behalf of the Republic of Benin, and Mr. NedhalAbdulazizAlolayan, Deputy Director-General of Kuwait Fund for Arab Economic Development, on behalf of Kuwait Fund in attendance of Mr. Thamer Al-Failakawi, Regional Manager, West African Countries at the Fund.
The project aims to support the socio-economic development in three cities, namely Boukoumbe, Cove, and Zagnanando, through the expansion and rehabilitation of the existing water supply systems, to provide adequate and sustainable quantities of water to meet the increased water demand, thus improving the health and social conditions of the residents at the project area.
The Project consists mainly of the civil and electromechanical works, which include construction of new borehole wells, distribution networks, storage reservoirs, pumps, and house connections. The project also includes the consulting services and the institutional support.
Total cost is estimated about 13.350 billion CFA Franc, equivalent to about KD. 6.544 million of which about 9.214 billion CFA Franc, equivalent to about KD. 4.517 million and representing about 69% of the total costs, are in foreign currency. The Fund’s Loan will cover about 76.4% of the cost of the Project.
The Loan matures over a period of 25 years including 5 years grace period, and will be amortized in 40 semi-annual installments, the first of which will be due on 1st date on which any interest or other charge on the Loan shall fall due after the elapse of the above-mentioned grace period. The Loan bears an interest rate at 1% per annum, in addition to 0.5% per annum to cover administrative costs and other expenses incurred in the implementation of the Loan Agreement.
The signing of this Loan brings to 14 the number of loans extended by Kuwait Fund to The Republic of Benin, where the Fund previously provided 13 loans totaling about 36 million Kuwaiti Dinars, equivalent to about US$ 122.4 million to participate in the financing in projects in the transport, water and power sectors of the economy. In addition, the Fund has also provided Benin with a Technical Assistance for the preparation of technical and economic studies of two projects in transportation sector in the amount of 300,000 Kuwaiti Dinars. Moreover, the Fund also administers the State of Kuwait Grant within the framework of Goodwill Fund initiative in the amount of 5 million US Dollars.
Source: Company Press Release