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Signature Of A Loan Agreement With Burkina Faso
16/01/2007: Signature of a Loan Agreement of KD. 3,600,000/- for financing Samendeni Dam for Agricultural Development Project in Burkina Faso
A Loan Agreement was signed today in Ouagadougou between Burkina Faso and Kuwait Fund for Arab Economic Development, whereby the Fund will extend a Loan of Kuwaiti Dinars three million six hundred thousand (KD. 3,600,000) (i.e. the equivalent of US$ 12 million) to help finance Samendeni Dam for Agricultural Development Project.
The Loan Agreement was signed on behalf of the Government of Burkina Faso by H.E. Sidou Bouda Minister of Economy and International Development and on behalf of the Fund by Mr. Hamad S. Al-Omar, Deputy Director-General of the Kuwait Fund for Arab Economic Development.
The Project aims at developing the agricultural production by irrigation of 1 500 ha, through the construction of a dam at the source of the upper Mouhoun River, with an ultimate goal of about 23000 ha.
The Project consists of mainly the construction of a 2,9 km long, 24,9 m high zoned earth dam across the Mouhoun river with a reservoir capacity of about 1 050 million m3; and a power plant with a total installed capacity of about 2,6 MW situated at the foot of the dam, in addition to a 33 kV overhead transmission line about 28 km long connects the power plant to the national grid at Bobo-Dioulasso. The Project also include the development of a net irrigated area of 1500 ha and the construction of about 23 km lined main irrigation canals, as well as secondary, tertiary, and drainage canals, field tracks and protection works and the necessary pumping stations. The Project comprises a provision for the resettlement of the farmers in the project area, which includes construction of houses with the necessary water supply, electricity, schools, basic health and veterinary facilities and related services. The Project also comprises a provision for institutional support for the Project Implementation Unit as well as the consulting engineering services required for detailed design, preparation of tender document and supervision of execution of various project's components.
The construction of the Project is expected to start by mid 2007 and to be completed by mid 2011.
The total cost of the project is estimated at FCFA 60.76 billion (equivalent to about KD 37.07 million), of about KD 23.81 million and representing about 71% of the total cost of the project, will be in foreign exchange. The Loan will cover about 11% of the total cost of the project.
The Loan is made for a term of 25 years including a grace period of 5 years, and is to amortized in 40 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, in accordance with the Loan Agreement after the elapse of the said grace period.
The Loan bears an interest at 1.5% 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 extending this Loan, Kuwait Fund for Arab Economic Development will have made 12 loans to Burkina Faso to finance projects in roads, water, agriculture and energy sectors with a total amount of KD 39,600,000/- (i.e. about US$ 132 million. Moreover, the Fund has extended to Burkina Faso 2 Technical Assistance Grants, the 1st of them amounts to KD. 150,000 (i.e. US$ 487,000) and the second Technical Assistance Grant amounts to KD. 64,300,000 (i.e. US$ 209,000) was extended as a Technical Assistance for Bagre Dam Project. The said amount has been totally withdrawn. On the other hand, the Government of the State of Kuwait had extended in 1984 a Grant for Burkina Faso (which was administrated by Kuwait Fund) of a total value of KD. 2,134,000 (i.e. US$ 6,900,000) as a contribution to the water supply programme for Liptako-Gourma Region. The said Grant was totally withdrawn.