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Signature Of A Loan Agreement For The Rehabilitation & Development Of The Poultry Industry In Egypt
17/6/2007: Signature of a Loan Agreement for K.D. 26 Million for Financing the Social Development Fund Program of Operations to assist in the Rehabilitation and Development of the Poultry Industry in the Arab Republic of Egypt.
A Loan Agreement was signed today in Cairo between the Government of the Arab Republic of Egypt and Kuwait Fund for Arab Economic Development (Kuwait Fund), whereby the Fund will make a loan of Kuwaiti Dinars (K.D.) 26 million to assist in financing the Social Development Fund Program of Operations designed to contribute to the Rehabilitation and Development of the poultry industry in the Arab Republic of Egypt. An agreement, relating to arrangements for the implementation of the Project, the Project Agreement, was also signed between Kuwait Fund and the Social Development Fund.
The Loan Agreement was signed on behalf of the Government of the Arab Republic of Egypt by Her Excellency Mrs. Fayza Mohammed Abul-Naja, the Minister for International Cooperation, whereas the Project Agreement was signed on behalf of the Social Development Fund by its Secretary General, Mr. Mohamed Hany Seif El Nasr. Both the Loan and Project Agreements were signed on behalf of Kuwait Fund by Mr. Abdulwahab Ahmed Al-Bader, the Director-General of Kuwait Fund.
The Project aims at mitigating and curtailing the effects of the spread of avain influenza and at the protection of public health and the stock of poultry in the country from this disease through the provision of financing for medium and small scale and micro projects, including expansions in existing projects, and constituting integrated processes in the production, preparation and marketing of poultry, with a view to the rehabilitation and development of the poultry industry and improving safety standards in the said industry.
The Project involves the provision of financing, mainly through intermediaries, for projects falling within the above-mentioned categories, which include about 35 manual, semi-mechanical and mechanical slaughter houses with capacities ranging between 500 and 10, 000 birds per hour and being equipped with facilities for chilling, freezing, storage, transport and other necessary facilities. The projects to be financed will also include the development or upgrading of about 100 farms for the production of grand parents and parents of broilers and layers, such farms to be equipped with all necessary facilities, including protective facilities for persons and birds, the upgrading or development of about 50 farms for the production of table eggs, with the necessary facilities for storage, packing and transport as well as protective facilities. In addition, the projects will include the upgrading or development of about 7000 farms for the production of broilers, with production capacities ranging between 5000 and 10,000 birds per production cycle and with facilities for feeding and the preparation of feedstuff as well as protective facilities, the development of about 12,000 outlets for the sale of broilers so that they may engage in selling chilled and frozen broilers instead of live poultry. The Project will also include the provision of micro-credits, through intermediaries, to breeders of poultry in homesteads in the countryside to enable them to adopt methods and measures which minimize the risks of avian influenza as well as provision of micro-credits to breeders of poultry in homesteads in urban areas so that they may engage in alternative income-generating activities.
The financing requirements for the above-mentioned Program of Operations of the Social Development Fund are estimated at Egyptian £800 million, equivalent to about K.D. 42.2 of which about Egyptian £366 million, equivalent to about K.D. 18.9 million are expected to be in foreign exchange. The Kuwait Fund Loan amounting to K.D. 26 million will cover about 62% of the financing requirements of the aforesaid Program of Operations, whereas the balance of these requirements will be met from the resources of Social Development Fund and the private investors.
The Loan is made for a term of 30 years, including a grace period of 10 years, and will be amortized by 40 semi-annual installments, the first of which will be due on the first date on which interest or other charges on the Loan shall be payable, according to the Loan Agreement, after the expiry of the aforementioned grace period which commences as of the date of the first withdrawal from the Loan. The Loan bears interest at the rate of 1.5% per annum in addition to a service charge of 0.5% per annum to cover administrative costs and the expenses of implementing the Loan Agreement.
The Loan represents the 29th. loan made by Kuwait Fund for the financing of projects in the Arab Republic of Egypt, as the Fund already made 28 loans, with a total amount of K.D. 398 million to finance projects in various sectors in Egypt. The Fund also provided technical assistance grants to the Government of the Arab Republic of Egypt amounting in total to about K.D. 1.1 million allocated for purposes which included the financing of feasibility studies for certain projects, financing the activities of the Center for Documentation of Economic and Social Reform Strategies and financing the preparation of a master plan for the development of areas in the vicinity of Lake Nasser. In addition Kuwait Fund administered two grants by the Government of the State of Kuwait, amounting in total to K.D. 4.84 million, one of which was in 1992 for the construction of some schools destroyed by the earthquake which took place in that year, while the other was made in 1995 for the reconstruction of a village damaged by floods.