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Signature Of A Loan Agreement For Educational Buildings In Beirut
Signature of a Loan Agreement for Kuwaiti Dinars Fifteen Million Four Hundred Thousand (KD 15,400,000) for Educational Buildings in Beirut Project in the Republic of Lebanon
A Loan Agreement was signed today in Beirut in the presence of H.E. Mr. Rafic Hariri, Prime Minister, between the Republic of LebanonEducational Building in Beirut Project. and Kuwait Fund for Arab Economic Development whereby Kuwait Fund will make a loan of Kuwaiti Dinars 15,400,000 (equivalent to about US$ 50.1 million) to assist in financing the Project.
The Loan Agreement was signed by His Excellency Mr. Jamal Aitani, the President of the Council for Development and Reconstruction on behalf of the Republic of Lebanon and Mr. Bader Al-Humaidhi, Director-General of the Kuwait Fund for Arab Economic Development on behalf of Kuwait Fund.
The Project aims at supporting the public education system in the Republic of Lebanon by providing necessary educational buildings, furniture and educational appliances adequate to meet the current and expected requirements of Beirut city in accordance with the approved standard for educational buildings.
The Project involves construction works for about 22 schools in Beirut city, all to house about 34,000 students in all educational stages before the university. The project shall also include providing furniture, appliances for such schools along with open spaces, play grounds, parking spaces and consultancy services for design, tender documents and supervision of execution.
The total cost of the Project, including physical and price contingencies, taxes, acquisition of land and interest during construction, are estimated at about K.D. 56.8 million, equivalent to about US$ 184.5 million, of which about K.D. 5 million, equivalent to about US$ 16.5 million, will be in foreign exchange and represents about 9% of the total cost of the Project. Kuwait Fund loan will cover about 27% of the total cost of the Project, which covers 76% of the Schools' construction and provision of furniture and appliances. The Government of Lebanon will also cover the balance of the costs of the Project.
Execution of the Project commences by mid 2002 and it is expected to be completed by mid of 2006.
The loan is made for a term of 30 years including a period of grace of five years commencing from the date of the first withdrawal from the loan or issue of a special commitment by the Fund in favour of a third party pursuant to the first withdrawal application. The loan will be amortized by fifty semi-annual instalments, the first of which will be due on the first date when interest or other charges on the loan becomes due after the aforesaid grace period. Thereafter, the other instalments for repayment of the loan will fall due successively at intervals of six months each. The Loan bears interest at 1.5% per annum, in addition to 0.5% per annum to cover administrative and other expenses incurred in the implementation of the Loan Agreement.
By executing this loan it will be the fourteenth loan made by the Fund to the Republic of Lebanon in a total amount of about K.D. 133 million, equivalent to about US$ 433 million, to finance projects in different developmental sectors. The Fund also made 6 grants-in-aid to the Republic of Lebanon with a total amount of about K.D. 2.7 million equivalent to US$ 8.8 million.
The Fund has administered on behalf of the Government of the State of Kuwait five grants-in-aid extended to the Republic of Lebanon in a total amount of K.D. 21 million, equivalent to US$ 68 million to finance health institutions, power stations and to participate in the rehabilitation of the south.