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Signature of Loan Agreement of Kuwaiti Dinars 5 Million for the Financing of the Revamping of Aquatic Environment in the Greater Freetown Project in the Republic of Sierra Leone and Signature of Project Administration Agreement
A Loan Agreement was signed today in the city of Freetown between the Republic of Sierra Leone and Kuwait Fund for Arab Economic Development, whereby Kuwait Fund will make a loan of Kuwaiti Dinars (K.D.) 5 million (equivalent to about U.S.$ 17 million) to assist in financing the Revamping of Aquatic Environment in the Greater Freetown Project. A Project Administration Agreement relating to the Project was also signed between the Guma Valley Water Company and Kuwait Fund. It is worth mentioning that the Fund is a Kuwaiti public corporation, which relies entirely on its own resources for making loans and providing other kinds of development assistance.
H.E. Mrs. Nabeela Tunis, Minister of Foreign Affairs and International Cooperation, signed the Loan Agreement on behalf of the Republic of Sierra Leone, and on behalf of Guma Valley Water Company. Mr. Marwan Al-Ghanem, Deputy Director-General for Operations of Kuwait Fund for Arab Economic Development signed both the Loan and Project Agreements on behalf of Kuwait Fund.
The project aims at improving the water supply and sanitation services while ensuring the sustainability of the vital aquatic ecosystem in the Greater Freetown in order to meet the current and future demand for safe drinking water, reduce loses, and protect general health of Greater Freetown population, which is estimated to reach about 4.95 million in year 2043. The Project also aims at creating jobs.
This will be achieved by immediate works in parallel to an integrated infrastructure improvement, which will include (a) rehabilitate and expand water treatment, transmission, storage and distribution systems; (b) improve solid and liquid waste collection, treatment and disposal services; (c) provide infrastructure and enhance capacity for the effective protection of the Protected Forest/Water-shed; and promote good sanitation, hygiene and child nutrition practices in the area of Greater Freetown; (d) The project will include 6 technical assistances to provide consultancy service and Project Management.
The total cost of the Project is estimated at about Sierra Leonean Leone 1897 billion, equivalent to about K.D. 63 million, of which about K.D 34 million is expected to be in foreign exchange, representing about 69% of the total cost of the Project, The Kuwait Fund loan will cover 8% of the total cost of the Project, whereas, the government of Sierra Leone together with the other co financers will cover the remaining cost.
The term of Kuwait Fund Loan is 20 years, including a grace period of 6 years. The Loan is to be amortized in 40 semi-annual installments, the first of which will be due on the first date on which interest or other charges on the loan will be due, in accordance with the Loan Agreement, after the expiry of the above-mentioned grace period. The Loan bears interest at the rate of 1% 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.
With this loan, the Fund will have provided 10 loans to Sierra Leone, as the Fund has previously given Sierra Leone 9 loans to finance projects in various sectors with total cost of about K.D. 32.709 million, equivalent to about US$ 111.2 million, of which about K.D. 26 million, representing about 80% of the total value of the loans, have been disbursed, and about K.D. 6.56 million, representing about 20% of said loans, have been reimbursed. In addition, the Fund has also provided Sierra Leone with three Technical Assistances of about 449 thousand Kuwaiti Dinars equivalent to about US$ 1.527 million. Moreover, the Fund has administered a State of Kuwait Grant with the framework of Goodwill Fund initiative in the amount of about US$ 3 million.