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Signature of a Loan and Guarantee Agreements for the Financing of the High Speed Rail Link (Tangier – Casablanca) Project in the Kingdom of Morocco
An Agreement of a Second Loan was signed today in the city of Rabat between Kuwait Fund for Arab Economic Development and the National Office for Railways (O.N.C.F.), whereby Kuwait Fund will make a second loan of Kuwaiti Dinars KD 15 million (equivalent to about US$ 44.1 million) to supplement its assistance in financing the High Speed Rail Link (Tangier – Casablanca) Project. A Guarantee Agreement relating to the second Loan was also signed between the Kingdom of Morocco and Kuwait Fund. It should be noted that the Fund had provided a first loan for the same project amounting to KD 25 million, thus making the total of the first and second loans for the same project 40 million Kuwaiti Dinars, furthermore it is worth mentioning that in extending its loans and developmental assistance, Kuwait Fund depends exclusively on its own resources.
His Excellency Mr. Mohammed BOUSSAID, Minister of Economy and Finance signed the Guarantee Agreement on behalf of the Kingdom of Morocco, while Mr. Mohamed Rabie Khlie, General Manager of the National Office for Railways signed the Loan Agreement on behalf of the said Office. Mr. Abdulwahab Ahmed Al-Bader, the Director-General of Kuwait Fund for Arab Economic Development signed both the Loan and Guarantee Agreements on behalf of Kuwait Fund. Mr. Abdullah Al-Musaibeeh, Regional Manager for Latin America and Caribbean Countries attended the Signing ceremony.
The Project, which will use high speed rail transport technology, aims at meeting the increasing demand on railways passenger traffic between Tangier, Quneitra, Rabat and Casablanca, reducing travelling time, improving railway transport efficiency, reducing operating costs in addition to improving safety and security and reducing the pollution resulting from reliance on road transport.
The Project involves the construction of a new dual track railway line, 196 KM long, for high speed trains connecting Tangier and Quneitra and travelling at a speed of 320 KM/Hour. This railway line will connect with the present line between Quneitra, Rabat and Casablanca which is 126 KM long and on which trains will be travelling at a speed of 160 KM/Hour. The Project includes land acquisition, civil works for the infrastructure for the high speed line, works for protection of the environment, railway track works, electricity supply lines, sub-stations, works required to develop the railway stations in Tangier, Quneitra, Rabat and Casablanca, signaling, communications and traffic management systems, construction of a workshop in Tangier for the maintenance of trains, one base in Assila and another in Quneitra for construction and maintenance of railway lines, in addition to the supply of high speed trains consisting of two locomotives and 8 railway double-decker carriages/wagons, each train having the capacity to accommodate 534 passengers. The Project also includes the provision of consulting services for the preparation of studies and supervision of construction as well as the provision of technical support to the department concerned with the high speed railway line.
The total cost of the Project is estimated at about Moroccan Dirhams 22.9 billion, equivalent to about KD 702 million, of which about Moroccan Dirhams 8.5 billion, equivalent to about KD 261.5 million, are in foreign exchange, representing about 37% of the total cost of the Project, and the Fund's two loans cover about 5% of its total costs.,. Works on project have begun on the first quarter of 2013, and is expected to be completed by mid of 2018.
Aside from the Fund's two loans, the Project will also be financed by loans from the Saudi Fund for Development, Abu Dhabi Fund for Development, the Arab Fund for Economic and Social Development, King Hassan II Fund, and a grant and loans from the French Government and other French agencies in addition to the allocations made by the Government of the Kingdom of Morocco and funding by O.N.C.F.
The term of Kuwait Fund Loan is 25 years, including a grace period of 6 years, which has started upon receipt of the first withdrawal order from the first Loan. The Loan is to be amortized in 46 semi-annual installments, the first of which will be due on 30/09/2019, after the expiry of the above-mentioned grace period. The Loan bears interest at the rate of 2.5% 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 thirty eighth loan by Kuwait Fund for the financing of projects in the Kingdom of Morocco, as Kuwait Fund already made 37 loans to the Kingdom of Morocco, or agencies thereof, of a total amount of about Kuwaiti Dinars 386.7 million, equivalent to about U. S. Dollars 1317 million, for the financing of projects in various sectors. In addition Kuwait Fund made a technical assistance grant amounting to KD 150,000, equivalent to about US$ 500,000, to meet the cost of preparation of economic and technical feasibility studies for providing potable water to villages and rural areas and also made a grant of KD 1 million for the construction and expansion of a hospital in Assila, together with a home for old and incapacitated people. Moreover, the Fund administers the utilization of the US$ 1.25 billion grant allocated by the Government of the State of Kuwait, and entrusted to the Fund for its administration, within the Framework of the GCC Development Program to finance development projects in Morocco.