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Signature Of A Loan Agreement In The Republic Of Benin
A Loan Agreement was signed in Cotonou between theGovernment of the Republic of Benin and the Kuwait Fund for Arab Economic Development, during the State Visit of His Highness Sheikh Naser Mohamed Al-Ahmad Al-Sabah, the Prime Minister of the State of Kuwait to the Republic of Benin, whereby the Kuwait Fund will make a loan in the amount of Kuwaiti Kuwaiti Dinars 4 million (equivalent to about U.S. $ 14 million) for the financing of Kandi – Segbana-Nigeria Border Project.
The Loan Agreement was signed by H. E. Roger Dovonou, Minister of Agriculture, Livestock and Fisheries, on behalf of The Republic of Benin, whereas Mr. Abdulwahab Al-Bader, the Director-General of the Kuwait Fund for Arab Economic Development signed the Loan Agreement on behalf of the Fund.
The Project aims at supporting the economic and social development of the Northern regions of Benin, through the implementation of the Northern transport corridor (of which the project is a part) linking the Republic of Nigeria and Burkina Faso through Benin, which will accommodate the increased traffic for passengers and goods. The Project also aims to reduce transport cost and travel time and improve road safety, as well as promoting the regional integration among the three countries and enhancement of trade among them.
The project involves the construction of a new two-lane bituminous surface treatment road of about 116 km and 7 meter width and with shoulders of 1.5 meter on each side of the road. The project includes the earthworks, paving layers and drainage structures as well as the construction and maintenance of bridges and road safety works. The project also includes the consultancy services for the design review, preparation of tender documents and supervision of construction works and a provision of institutional support for the Executing Agency as well as other ancillary works.
The total cost of the Project is estimated at African Francs 43.05 billion, equivalent to about KD 23.17 million, of which KD 16.2 million in foreign currencies representing 69% of the total cost. The Loan will cover about 17% of the total cost of the project. The Arab Bank for Development in Africa, the Islamic Development Bank, the OPEC Fund for International Development and the Saudi Fund for Development will also participate in the financing of the project, while the remaining cost will be covered by the Government of Benin.
The Project works have already started and it is expected to be completed by the end of the year 2012.
The Loan is made for a term of 25 years, including a period of grace of about 5 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 elapse of the grace period. Loan will bear interest at 2% per annum in addition to a charge of 0.5% for meeting administrative costs and the expenses of implementation of the Loan Agreement.This Loan represents the 10th loan made by Kuwait Fund to the Republic of Benin, as the Fund already made 9 loans to Benin with a total amount of about KD 20.5 million to finance projects in the irrigation, energy and road sectors.