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Signature of a Second Loan Agreement for Financing the Construction of a Sea Water Desalination Plant Project for Eastern Port Said City in the Arab Republic of Egypt
A loan agreements was signed today in Cairo between the Government of the Arab Republic of Egypt and Kuwait Fund for Arab Economic Development whereby, the Fund will make a second loan of Kuwaiti Dinars 18.5 Million (equivalent to about US$ 55 Million) to assist in financing the Construction of a Sea Water Desalination Plant Project for Eastern Port Said City. Furthermore, it is worth mentioning that in extending its loans and developmental assistance, Kuwait Fund depends exclusively on its own resources.
The Agreement was signed on behalf of the Government of the Arab Republic of Egypt by Her Excellency Dr. Sahar Ahmed Mohammed Abdul-Moniem Nasr, the Minister of Investment and International Cooperation, and on behalf of Kuwait Fund for Arab Economic Development by Mr. Abdulwahab Ahmed Al-Bader, Director-General of the Fund.
The Project aims at meeting the expected demand for potable water, whether for drinking or commercial and industrial uses, in the new Eastern Port Said City which is currently under construction. The Project involves the construction of a sea water desalination plant with a production capacity of 150,000 cubic meters per day, using the technology of reverse osmosis, together with structures for the intake of sea water and disposal of used water designed for a plant of a capacity of 250,000 cubic meters per day to take account of future expansion in the production capacity of the desalination plant. The Project includes all civil works required for the desalination plant and the construction of the networks for transmission and distribution of water, with a total length of about 700 kilometers, as well as the storage tanks required for the said networks, fittings, measurement and control equipment, all electrical and mechanical works required for the operation of the desalination plant. The Project is expected to be completed by the end of 2019.
The total cost of the Project is estimated at about Egyptian Pounds 6137 Million, equivalent at the time to about Kuwaiti Dinars 95 Million, and of which about Egyptian Pounds 3682 Million, equivalent to about Kuwaiti Dinars 57 Million, will be in foreign exchange, representing about 60% of the total cost of the Project. The Fund's first and second loans, which are in the total value of Kuwaiti Dinars 53.5 million, will cover about 56% of the total costs of the Project (equivalent to about 93.9% of foreign exchange costs of the Project).
The Loan will be for a term of 25 years, including a grace period of 5 years, and is to be repaid in 40 semi-annual instalments, the first of which will be due on the first date on which interest or other charges on the Loan will fall due in accordance with the Loan Agreement, after the expiration of the said grace period. The Loan bears interest at the rate of 1.5% per annum, in addition to a service charge of 0.5% per annum to meet administrative costs and other expenses related to the implementation of the Loan Agreement.
The loan represents the 44th loan made by Kuwait Fund for the financing of projects in the Arab Republic of Egypt, as the Fund has previously made 43 loans to the Government of the Arab Republic of Egypt or to entities which are subordinate to it, to finance projects in various sectors, with a total amount of about Kuwaiti Dinars 815 Million (equivalent to about US$ 2.77 Billion). The Fund also provided 14 grants and technical assistance allocations to Egypt with a total amount of about Kuwaiti Dinars 3.3 Million (equivalent to about US$ 11 Million) allocated for financing technical and economic feasibility studies for certain projects, and financing other activities. Kuwait Fund also administered two Grants provided by the Government of the State of Kuwait to the Arab Republic of Egypt with a total amount of about Kuwaiti Dinars 4.8 Million (equivalent to about US$ 16.8 Million) for the purpose of reconstruction of some schools that were affected by earthquake in 1992, and the reconstruction of some villages that were damaged by floods in 1995.