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Signing a Loan Agreement of K.D. 15 Million in the Government of the People’s Republic of Bangladesh to Finance the Urban Infrastructure Improvement Project
A Loan Agreement between the Kuwait Fund for Arab Economic Development and the Government of the People's Republic of Bangladesh has been signed today in Dhaka whereby the Kuwait Fund extends a Loan in an amount of KD 15,000,000/- (equivalent to about US$ 51 million) to participate in the financing of Urban Infrastructure Improvement Project. It is worth mentioning that the Fund is a Kuwait Public Corporation which relies entirely on its own resources for making loans and providing other kinds of development assistance.
The Loan Agreement was signed by H.E. Kazi Shofiqul Azam, Secretary, Ministry of Finance on behalf of the Government of the People's Republic of Bangladesh, and Mr. Hamad Al-Omar, Deputy Director-General of Kuwait Fund for Arab Economic Development on behalf of Kuwait Fund in attendance of His Excellency Mr. Adel Mohammed Hayat, Ambassador of the State of Kuwait to Bangladesh and Mr. Waleed Al-Bahar, Regional Manager for East, South Asia and Pacific Countries..
The Project aims to contribute to enhance the economic and social development of Bangladesh by improving the standard and quality of civic facilities in the Project areas and enhance the quality of life of the dwellers thus contributing to the improvement of urban living standard and fostering economic mobility of the people of the 53 small and medium towns in Bangladesh.
The Project consists of the necessary works for the urban development in 53 Municipalities, and it will include the construction of urban roads, longitudinal surface drains, culverts and bridges for water drainage, public transport passengers sheds, public toilets, vegetables and agricultural products markets sheds, public parks and playgrounds, supply and installation of streets lighting, preparation of solid waste dumping areas, supply and installation of wastebaskets, provision of non-motorized vehicles for waste transport, and the necessary consultancy services for the preparation of detailed engineering designs, tender documents, and supervision of construction, provision of a project management unit, institutional support which includes supply of site vehicles, motor cycles, computers, photocopying machines, fax machines, in addition to training of technical personnel of LGD, LGED, and the Municipalities which will manage the Project. The Project is expected to be completed by the end of 2021.
Total cost is estimated about 9,931 Million Taka, equivalent to about KD 37 million of which about 5,790 million Taka equivalent to about KD 21.56 million and representing about 58% of the total costs, are in foreign currency. The Fund's Loan will cover about 40.6% of the cost of the Project while the Government of Bangladesh will cover the remaining costs of the project.
The Loan matures over a period of 22 years including 5 years grace period, and will be amortized in 34 semi-annual installments, the first of which will be due on 1st date on which any interest or other charge on the Loan will fall due after the elapse of the above-mentioned grace period. The Loan bears an interest rate at 1.5% per annum, in addition to 0.5% per annum to cover administrative costs and other expenses incurred in the implementation of the Loan Agreement.
By signing this Loan Agreement, the Fund will have provided 24 loans to the People's Republic of Bangladesh, where the Fund previously provided 23 loans totaling about 166.21 million Kuwaiti Dinars, equivalent to about US$ 556.1 million to participate in the financing of projects in various sectors. The Fund also extended to the Government of the People's Republic of Bangladesh 3 technical assistances, in the total amount of about KD 423 thousand, to financing of feasibility studies of projects in the transport sector. The Fund also administered State of Kuwait's Grant of US$ 10 million from the resources of Kuwait Goodwill Fund, which was established, in order to assist Islamic countries in their endeavours to achieve food security and assure the basic right to food to their people.