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Signature of an Agreement for a Loan to Finance improving the Drinking Water Supply system in the city of Al-Arish in the Arab Republic of Egypt
A Loan Agreement was signed today in Kuwait between the Government of the Arab Republic of Egypt and the Kuwait Fund for Arab Economic Development, whereby the Fund will make a loan of Kuwaiti Dinars 12.5 Million (equivalent to about US$ 42.5 Million), to Finance improving the Drinking Water Supply System in the city of Al-Arish.
The Loan Agreement was signed on behalf of the Government of the Arab Republic of Egypt by Her Excellency Dr. Sahar Ahmed Mohammed Abdul-Moniem Nasr, 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 Kuwait Fund in attendance of His Excellency Tariq Al-Qooni, Ambassador of the Arab Republic of Egypt to the State of Kuwait.
The Project aims to support the economic and social development in the project area, through the improvement of the infrastructure of water supply system, specifically, to limit the water loss and to provide additional sustainable drinking water to cover the water deficit in Al-Arish City.
The Project consists mainly of the necessary civil and electromechanical works, to develop and expand the existing water supply system in AL-Arish city located North Governorate of Sina, in addition to the consultancy services to review the detailed design and project supervision of part "B" of the project.
The total cost of the Project, including physical and price contingencies, taxes and interest during construction, is estimated at about Egyptian Pounds 1.55 billion, equivalent at the time to about Kuwaiti Dinars 25.44 Million, and of which about Egyptian Pounds 490 Million, equivalent to about Kuwaiti Dinars 8 Million, will be in foreign exchange, representing about 31% of the total cost of the Project while the balance would be covered by the government of the Arab Republic of Egypt.
The Loan will be for a term of 24 years, including a grace period of 4 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.
This loan represents the 45th loan made by Kuwait Fund for the financing of projects in the Arab Republic of Egypt, as the Fund has previously made 44 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 833 Million (equivalent to about US$ 2.8 Billion). The Fund also provided 16 grants and technical assistances to Egypt with a total amount of about Kuwaiti Dinars 3.9 Million (equivalent to about US$ 13.3 Million) 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 Million) for the purpose of preparation of feasibility studies in different sectors.