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Signing A Loan Agreement For Financing The South Eastern University Of Sri Lanka
17/07/2007: Signing a Loan Agreement for KD. 2 Million for Financing the South Eastern University of Sri Lanka Development Project (Phase 1"A")
A Loan Agreement was signed today in Colombo between the Democratic Socialist Republic of Sri Lanka and the Kuwait Fund for Arab Economic Development whereby the Fund will provide a loan to the Democratic Socialist Republic of Sri Lanka in the amount of Kuwaiti Dinars 2 Million (Equivalent to about US$ 6.8 million) for financing the South Eastern University of Sri Lanka Development Project (Phase 1"A")
The Loan Agreement was signed by Dr. P.B. Jayasundera, Secretary, Ministry of Finance and Planning on behalf of the Democratic Socialist Republic of Sri Lanka, whereas Mr. Hesham Ibrahim Al-Waqayan, Deputy Director-General, signed the Loan Agreement on behalf of the Fund.
The Project represents Phase I "A" of a Development Plan, for the University of South Eastern Sri Lanka in Ampara District that aims to support the social development and economic growth of Sri Lanka by improving the quality of Degree Courses at the said University to reflect regional and national needs and at the same time increase student numbers, by developing the necessary academic infrastructure and introducing new demand driven degree programmes.
The Project consists of construction works that include civil engineering and electro-mechanical works for a number of buildings and facilities, external works which include site clearance, roads works, electrical installations and sub stations, water supply, waste water and sewage system, landscaping, flood defense and other related works, supply and installation of furniture and educational and information technology equipment, academic development plan which includes curriculum development and capacity building and training for the academic staff, and consultancy services for detailed design, preparation of tender documents and assistance in analysis of tenders and supervision of construction.
The execution of the project is expected to commence in mid 2007 and is expected to be completed by the end of 2010.
The total cost of the project is estimated at about Sri Lanka Rupees 1.113 Billion (equivalent to about KD. 3.088 million) of which the equivalent of about KD. 2.055 Million representing 66.5% of the total cost is in foreign currencies. The Fund Loan will cover about 64.7% of the total cost of the Project whereas the Government of Sri Lanka, the World Bank and other foreign Universities will provide the remaining balance of the cost or about 35.2% of the total cost and all necessary funds to cover any additional expenses.
The Loan is made for a term of 24 years, including a grace period of 4 years, and will be amortized on 40 semi-annual installments, the first of which will be due on the first date on which any interest or other charges on the loan shall fall due after the elapse of the grace period. The loan will bear interest at 1% per annum in addition to a charge of 0.5% for meeting administrative costs and the expenses of implementing the Loan Agreement.
With this Loan becoming effective, the Fund will have provided ten loans to the Democratic Republic of Sri Lanka as the Fund has previously provided it with nine loans to finance projects in various sectors totaling about KD. 39.7 million (equivalent to about US$ 135 million).