Signature of a Loan Agreement in the Socialist Republic of Vietnam
Wednesday, 08 August 2012
Loan Agreement was signed today in Hanoi between the Socialist Republic of
Vietnam and Kuwait Fund for Arab Economic Development whereby a loan is being
made by the Fund in the amount of KD 4 million (equivalent to about US$ 14.3
million) to assist in financing the Multipurpose Rural Development Project in Da Bac's
District (Hoa Binh Province)
Loan Agreement was signed on behalf of the Socialist Republic of Vietnam by H.E.
Mr. Truong Chi Trung, Deputy Minister of Finance, and was signed on behalf of
Kuwait Fund for Arab Economic Development by Mr. Hesham Al-Waqayan, Deputy
Director-General of the Fund.
The project aims at supporting the
rural economic and social development and poverty reduction by improving the
basic rural infrastructure in selected 10 poorest communes in Da Bac district
of Hoa Binh province.
The project consists of the
construction and upgrading of inter commune rural roads, small-scale irrigation
schemes, and social facilities, which include schools, kindergartens, health
care centers, public potable water supply collection points, local markets,
reception office, and communal buildings for ethnic minority people, with the
following main components: (1) the construction and upgrading of about 38
sections of inter-commune and inter-village rural asphalt and concrete paved
roads, with a total length of about 84km, (2) the construction and upgrading of
4 reservoirs with varied capacities, (3) 8 dams with an average capacity of
about 5000m3 each, (4) 10 irrigation canals with a total length of
about 18.5km, (5) the construction and upgrading of 10 elementary and secondary
schools, 5 boarding dormitories schools, (6) 4 kindergartens, (7) 3 health care
centers, (8) 2 communal markets, (9) 1 reception office, (10) 4 public potable
water supply collection points and 7 community communal buildings.The project also includes consultancy
services and a provision for institutional support.
Project is expected to be completed by the end of December of year 2016.
total Project cost, including physical and price contingencies, taxes, and
interest during construction, is estimated at about 420 billion Vietnamese Dong,
equivalent to about KD 5.9 million, of which the equivalent of about KD 0.7
million would be in foreign exchange, representing about 12% of the total cost
of the project.The loan provided by the
Fund in the amount of KD 4 million would cover about 68% of total project cost,
while the balance would be covered by the government of Vietnam.
loan is made for a term of 22 years, including a grace period of 5 years
starting as of the commencement of withdrawals from the loans, which will thus be
repaid in 34 semi-annual installments, the first of which shall fall due on the
first date on which interest and other charges on the loan shall fall due after
the elapse of the grace period.The loan
will bear interest at the annual rate of 2%, in addition to a loan
administration charge at the annual rate of 0.5%.
It is worth mentioning that by extending this loan, the
Fund will have provided 11 loans to the Socialist Republic of Vietnam, as the
Fund has previously provided the country with 10 loans, in a total amount of
about KD 36.3 million (equivalent to about US$ 129.37 million) to assist in
financing projects in various sectors. In addition, the Fund has provided to
Vietnam a technical assistance in the amount of about KD 84 thousand (equivalent
to about US$ 300 thousand) to assist in the carrying out of a study of the