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SIGNATURE OF A LOAN AGREEMENT FOR FINANCING THE CONSTRUCTION OF TWO SEWERAGE SYSTEMS PROJECT IN EL-CHOUF DISTRICT IN THE LEBANESE REPUBLIC
A loan agreement was signed today in the city of Beirut between the Lebanese Republic and Kuwait Fund for Arab Economic Development (the Fund), whereby the Fund will make a Loan of Kuwaiti Dinars (KD) 15 million (equivalent to about US$ 50 million) to the Lebanese Republic to assist in the financing the Construction of Two Sewerage Systems Project in El-Chouf District. It is worth-mentioning that the Fund relies entirely on its own resources in making loans and providing other kinds of development assistance.
The Loan Agreement was signed by His Excellency Mr. Nabeel Adnan Al-Jisr, Chairman of the Council for Development and Reconstruction, on behalf of the Lebanese Republic and by Mr. Abdulwahab Ahmed Al-Bader, Director-General of Kuwait Fund for Arab Economic Development, on behalf of the Fund.
The Project aims at safeguarding public health and protection of the environment and under-ground water from pollution by sewage water, and to that end the Project will consist of the construction of two systems for the collection and treatment sewage water and the disposal of the treated sewage water.
The Project consists of the construction of two sewage plants for the tertiary treatment of sewage water, and involves the execution of all necessary civil, mechanical and electrical works. One of these plants will have the capacity of treating 10,000 cubic meters of sewage water per day and will serve 7 villages, while the other plant will have a capacity of 26,000 cubic meters per day to serve 13 villages. The Project also includes the construction of main transmission lines for sewage water, the networks for collection of sewage water, house connections and two pipe-lines for disposal of treated sewage water. The Project also includes the provision of consulting services for the preparation of designs and supervision of construction.
The total cost of the Project, including contingency allocation for prices and quantities, the cost of land acquisition and interest during construction, is estimated at US$ 80 million, equivalent to about Kuwait Dinars (KD) 24 million of which about US$ 56 million, equivalent to about KD. 17 million and representing about 70% of the total cost of the Project are expected to be in foreign exchange. The loan from Kuwait Fund amounting to KD 15 million, as mentioned before, will cover about 62% of the total cost of the Project.
The Loan will be made for a term of 25 Years, including a grace period of 5 years, and will be repaid by 40 semi-annual instalments, the first of will fall due on the first date for payment of interest after expiry of the said grace period. The loan bears interest at the rate of 2% per annum in addition to a service charge of 0.5% per annum for meeting administrative costs and the expenses of implementing the Loan Agreement.
The Loan represents the 27th loan by the Fund to the Lebanese Republic, as the Fund already made 26 loans to it amounting in total to about KD 274 million (equivalent to about US$ 917 million) for the financing of projects in various sectors. Besides, the Fund made 6 grants amounting in total to about KD 2.7 million (equivalent to about US$ 9.2 million) and allocated mainly for programs of strengthening health facilities and programs of training of government cadres. The Fund also made two technical assistance allocations of a total amount of KD 880,000 (equivalent to US$ 3 million) to finance the studies and preparation of a project in the energy sector and another project in the transport sector. In addition to the above, the Fund was entrusted with the administration of 7 grants by the Government of the State of Kuwait to the Lebanese Republic amounting in total to about KD 120 million (equivalent to about US$ 420 million).