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Signature of a Loan Agreement financing the Gbarnga – Salayea Road in the Republic of Liberia
A Loan Agreement was signed today in Monrovia between the Republic of Liberia and Kuwait Fund for Arab Economic Development whereby the Fund will extend a loan of Kuwaiti Dinars five million (KD.5,000,000/-) (i.e. equivalent to about 17 million US$) to help finance the Gbarnga – Salayea Road Project.
The Loan Agreement was signed on behalf of the Republic of Liberia by H.E. Mr. Amara Konne , Minister of Finance and on behalf of the Fund by Mr. Ghanem Sulaiman Al-Ghenaiman, Deputy Director-General of the Kuwait Fund for Arab Economic Development in attendance of Mr. Thamer Al-Failakawi, Regional Manager for West African countries at the Fund.
The aim of the Project is to enhance the economic and social development of the central region of Liberia, and at the same time to participate in linking Liberia with the neighboring Republics of Guinea and Sierra Leone.
The Project consists of construction works to attain an all-weather asphalted road of an approximate length of about 81 km and a width of 7.5 m. (with 1.5 m. shoulders on each side) between Gbarnga and Salayea. The Project also includes construction works of drainage facilities, re- construction or rehabilitation of bridges, protection, safety and environmental protection facilities, as well as the consultancy services to review the detailed design and supervision of construction, and institutional support, and land acquisition. The Project is expected to be completed by the end of 2019.
The total cost of the Project is estimated at about 9,095.51 billion Liberian Dollars, the equivalent of about KD. 28.921 million, of which the foreign exchange is equivalent to about KD. 24.821 million, which represents about 85.8% of the total cost of the Project. The Fund's Loan will cover about 17% of the total cost of the Project, or of about 20% of the foreign exchange component of the costs of the Project. The Project will also be financed, together with the Fund, by the Saudi Fund for Development with loan in the amount of about 5.88 million Kuwaiti Dinars representing 20% of the total cost of the Project, the OPEC Fund for International Development with loan in the amount of about 5.88 million Kuwaiti Dinars representing 20% of the total cost of the Project, the Abu Dhabi Fund for Development with loan in the amount of about 4.41 million Kuwaiti Dinars representing 16.8% of the total cost of the Project, and the Arab Bank for Economic Development in Africa with loan in the amount of about 2.61 million Kuwaiti Dinars representing 10% of the total cost of the Project, while the government will provide for the financing of the rest of the project costs.
The Loan will be for a period of 26 years including 5 years grace period, and will be amortized in 42 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.
By concluding this agreement, it will be the third Loan that the Fund provided to Liberia, where the Fund previously provided two loans amounting to about 6 million Kuwaiti Dinars equivalent to about 20 million U.S. Dollars for financing projects in transport sector. In addition, the Fund has also provided Liberia with one Technical Assistance of about 423,000 Kuwaiti Dinars (equivalent to about 1.44 million United States Dollars) for financing feasibility studies of this Project.