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Signing a Loan Agreement of KD 4,411,000 for financing the Rumonge – Nyanza Lac Road Project in the Republic of Burundi
A Loan Agreement between Kuwait Fund for Arab Economic Development and the Republic of Burundi has been signed today in Bujumbura whereby Kuwait Fund extends a Loan in an amount of KD 4.411 million equivalent to about US$ 15 million to participate in the financing of the Rumonge – Nyanza Lac Road Project. It is worth mentioning that in extending its loans and providing other kinds of development assistance, Kuwait Fund depends entirely on its own resources.
The Loan was made in pursuance of an initiative by His Highness Sheikh Sabah Al-Ahmed Al-Jaber Al-Sabah, the Amir of the State of Kuwait announced at the 3rd Africa-Arab Summit held in Kuwait during the period 19 - 20 November 2013 to grant concessionary loans to African countries to the tune of one (1) Billion US Dollars spread over the succeeding five years for financing development projects in the African countries.
The Loan Agreement was signed on behalf of the Republic of Burundi by His Excellency Dr. Domitien NDIHOKUBWAYO, Minister of Finance, Budget and Privatization of the Republic of Burundi, and on behalf of Kuwait Fund for Arab Economic Development by Mr. Ghanem Sulaiman Al-Ghenaiman, Deputy Director-General of the Fund, in attendance of Mr. Ayad Al-Gharaballi, Regional Manager, Central, East & South African Countries at the Fund.
The Project aims to meet the increasing demand for the transport of passengers and goods on the north-south corridor of Burundi, promoting the increasing trade with the neighboring countries, and to contribute to the economic and social development of the project area. The project also aims to reduce vehicle operation and road maintenance costs, and travel time.
The project consists of the rehabilitation of the Rumonge – Nyanza Lac Road, with a length of about 52 kilometer, consisting of two lanes, with a width of about 7 meter, and shoulder of about 1.5 meter on each side. The project comprises, also, the consultancy services for design review and the supervision of the construction of works, in addition to the required Institutional support
The total cost, including physical and price contingencies, taxes and interest during construction, is estimated about BUR 132.033 million, equivalent to about KD 21.574 million of which about KD 16.898 million are in foreign currency and representing about 78% of the total cost. The loan, for KD 4.411 million, will cover of about 21% of the total project cost, in addition to the financing of the Arab Bank for Economic Development in Africa (BADEA), the Saudi Fund for Development (SFD), the OPEC Fund for International Development (OFID), each in the amount equivalent of about KD 4.411 million, with an equal percentage of 21% for each of them, while the balance and any cost over-runs that may occur whether in local or foreign currency would be covered by the government of Burundi.
The Loan matures over a period of 27 years including 5 years grace period, and will be amortized in 44 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 1.5% 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 9 the number of loans accorded by Kuwait Fund to the Republic of Burundi, where the Fund previously provided 8 loans totaling about 12.59 million Kuwaiti Dinars, to participate in the financing in projects in various sectors.