Signing of a Loan Agreement in the Republic of Yemen
Monday, 28 May 2012
A Loan Agreement was signed today in Sana'a between the Republic of Yemen and Kuwait Fund for Arab Economic Development, whereby the Fund will provide a loan of Kuwaiti Dinars 9 million (equivalent to about U.S.$ 31 million) to assist in the financing of the Transmission Lines and substations (Al Habeelein – Yafaa – Al Baida) Project.
The Loan Agreement was signed on behalf of the Republic of Yemen by His Excellency Dr. Mohammad Saeed Al-Saeedy, Ministry of Planning and International Cooperation, and on behalf of the Kuwait Fund by Mr. Abdulwahab Al-Bader, Director-General of the Kuwait Fund for Arab Economic Development.
The Project aims at strengthening and developing the electrification system in Yemen in order to supply several main towns, rural villages and other communities with electric energy generated in Maareb Station, as well as connecting new load centers (Yafaa and Al Baida) to the national grid.
The Project consists of the supply and constuction of 132 KV transmission lines about 106 KM long Habeelein -Yafaa - Al-Baida, the extension of the Habeelein132/33 KV substation, the construciton of two new 132 KV substations at Yafaa and Al-Baida with 2 x 45 MVAtransformer capacity each as well as the extension and rehabilitation of the medium voltage (33/11 KV) and low voltage (11/0.4 KV) distribution networks in Yafaa and Al-Baida totalling about 180 KM and associated substations.
The total cost of the project is estimated at about Yemeni Riyal 13.731 Billion equivalent to about Kuwaiti Dinars 17.56 million of which the foreign cost is about KD. 13.85 million which represents 79% of the total costs of the project.The Fund's loan covers about 51% of the total project cost while the Government of Yemen will cover the rest of the cost and any gap in the financing plan.
The Loan shall be for a period of 25 years including a grace period of 5 years. The Loan will be amortized on 40 semi-annual installments, the first of which shall be due on the first date on which any interest or other charges on the loan shall fall due after the elapse of the grace period.The Loan bears interest at 2% per annum, in addition to 0.5% per annum to cover administrative and other expenses to be incurred in the implementation of the Loan Agreement.
By concluding this agreement the Fund would have provided the Republic of Yemen 32 loans considering that it had already provided 31 loans totalling about KD.95million (equivalent to about US$ 323 million) to finance Projects in various sectors, in addition to 17 grants totalling about KD. 2.9 Million (equivalent to about US$ 10.8 Million).The Government of the State of Kuwait had also extended 3 Grants, the first was allocated to build houses in Zamar Region with a total value of KD. 2.5 Million (US $ 8.7 Million), the second amounts to KD. 18 Million (equivalent to about US$ 6.1 Million) for the Goodwill Fund for Promotion of Food Security in Yemen , and the the third amounts to KD. 0.96 Million (equivalent to about US$ 2.4 Million) to support the combat Malaria Strategy.