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Signing A Loan Agreement For Kd 4,000,000/- At Socialist Republic Of Vietnam
A Loan Agreement was signed today in Hanoi between the Socialist Republic of Vietnam and Kuwait Fund for Arab Economic Development, whereby the Fund will provide a Loan of Kuwaiti Dinars Four Million (equivalent to about US$ 14 million) to assist in the financing of Phu Thong - Khang Ninh Road Project in Bac Kan Province.
The Loan Agreement was signed on behalf of the Socialist Republic of Vietnam by H.E. Mr. Tran Xuana Ha, Vice Minister of Finance, and on behalf of the Fund by Mr. Hesham Al-Waqayan, Deputy Director General of Kuwait Fund for Arab Economic Development.
The Project aims at meeting the increasing demand for road transportation in the Province of Bac Kan and will thus help to enhance the social and economic development of the Bac Kan Province and to promote tourism in the said Province.
The Project consists of the construction of an asphalted road from the township of Phu Thong to the Khang Ninh within the vicinity of the Ba Be tourist lake in the Ba Be District, with an approximate length of 46 Kms, width of 6.0 meters, and two paved 0.75 meter shoulders. A number of minor roads, with an approximate total length of 10 Kms, shall be constructed to connect nearby villages to the Project, as well as connecting the end of the Project to the Ba Be lake and the National Park. The Project also consists of the following main components: (1) Land appropriation for the Project, (2) Civil Engineering Works including earthworks, paving layers, asphalting, drainage structures, bridges, safety measures, environmental preservation measures as well as erosion protection works, (3) Institutional support required for the Project, and (4) Consulting services for the Project.
Implementation of the Project has commenced during September 2007 and is expected to be completed during December 2010.
The total cost of the project is estimated at about 351 billion Vietnamese Dong (equivalent to KD 6.36 million) out of which KD 4.05 million is in foreign currencies which constitutes about 64% of the total cost. The Fund's Loan amounting to KD 4 million will cover 63% of the total project cost, while the remaining cost will be covered by the Government of Vietnam.
The Loan will be for a period of 20 years including a grace period of 4 years. The Loan will be amortized on 32 semi-annual installments. The Loan bears interest of 2.5% per annum, in addition to 0.5% per annum to cover administrative and other expenses to be incurred in the implementation of the Loan Agreement.
By signing this Agreement, the Fund would have provided to the Socialist Republic of Vietnam 8 Loans, as the Fund already made 7 Loans to Vietnam with a total amount of KD 24.22 million (Equivalent to about US$84.8 Million) to finance projects in Agriculture, Irrigation, Industry and Transport sectors. The Fund also provided a Technical Assistance to Vietnam in the amount of KD 84,000/-, for the feasibility study of a project in the industry sector, which has been fully withdrawn and considered as a Grant in Aid.