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Signing a Loan Agreement for the Financing of Batumi – Akhaltsikhe (Khulo – Goderdzi Section) Road Project in Georgia
A Loan Agreement was signed today in the Capital Tbilisi between Georgia and the Kuwait Fund for Arab Economic Development, whereby the Fund will extend a loan of Kuwaiti Dinar (KD) 8,000,000 (equivalent to about USD 27 million) for the financing of Batumi – Akhaltsikhe (Khulo – Goderdzi Section) Road Project. It is worth mentioning that in extending its loans and developmental assistance, Kuwait Fund depends exclusively on its own resources.
The Loan Agreement was signed on behalf of the Republic of Georgia by His Excellency Dimitry Kumsishvili, First Vice Prime Minister and the Minister of Finance, and was signed on behalf of the Fund by Mr. Hesham Al-Waqayan, Deputy Director-General of the Kuwait Fund for Arab Economic Development. Mr. Yousef Al-Bader, Regional Manager for Central Asian & European Countries at Kuwait Fund attended the signing Ceremony.
The Project aims at supporting the economic and social development in Georgia, and specifically in the mountainous areas surrounding the road, by improving access for the residents of these areas to reach places of work and social services, facilitating the transport of products and goods to markets, improving access to touristic sites, increasing the cross-border transport, reducing pressure on alternate roads, in addition to other benefits resulting from improved transport efficiency and reduced economic transport cost and time for passengers and goods, including enhanced traffic safety under most weather conditions.
The Project consists of civil works for the reconstruction and rehabilitation of the road section, and involves covering it with asphaltic concrete in accordance with sound engineering specifications, for a length of about 29 km, and width of 7.5 meters with shoulders of 1-2 meters, including traffic safety signage, furniture and markings. The works include the construction of concrete culverts and roadside channels for water drainage, reconstruction of four bridges, in addition to the construction of retaining walls in different locations to fortify the roadbed for an accumulative length of 14 km. The Project also includes the provision of consulting services for review of detailed design, inclusion of traffic safety measures, and project execution supervision, and includes institutional support to provide a full time expert for project execution management.
The total cost of the Project is estimated at about Georgian Lari (GEL) 93.3 million (equivalent to about KD. 12.5 million), about 47% of which in foreign currencies. The Kuwait Fund Loan will cover about 64% of the total estimated cost of the Project.
The Loan will be for a term of 25 years including a grace period of five years, and will be amortized in 40 semi-annual installments after the said grace period. The Loan bears interest at the rate of 2.0% per annum in addition to a charge of 0.5% per annum to cover administrative and other expenses relating to the implementation of the Loan Agreement.
With this Loan, Kuwait Fund will have made three loans to the Republic of Georgia to finance projects in the transport sector, of a total amount of about KD. 17.3 million (equivalent to about USD 59 million).