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Signing a Loan Agreement of KD 4,500,000 for financing Tougan - Ouahigouya Road Project (RN 10) in Burkina Faso
A Loan Agreement between Burkina Faso and Kuwait Fund for Arab Economic Development has been signed today in Ouagadougou, whereby Kuwait Fund extends a Loan in an amount of KD 4.5 equivalent to about US$ 15.3 million to participate in the financing of Tougan – Ouahigouya Road Project (RN 10). 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.
The Loan Agreement was signed on behalf of Burkina Faso by His Excellency Lassane Kabore, Minister of Finance and Development of Burkina Faso, and on behalf of Kuwait Fund for Arab Economic Development by Mr. Nedhal Abdulaziz Al-Olayan, Deputy Director-General of Kuwait Fund for Arab Economic Development in attendance of Mr. Thamer Al-Failakawi, Regional Manager, West African Countries at the Fund.
The Project aims to contribute to the social and economic development by supporting the integration of the road network in the country, upgrading the level of roads' safety and reducing the costs of transportation and travel time. The Project will also contribute to serving the agricultural development efforts in the Project area, in addition to creating jobs and facilitating access to education and health services for the population.
The project consists of construction works to attain an asphalted road with a length of about 94 km and a width of 7 meters (and 1.5 meters shoulders on each side) in addition to construction works to attain asphalted roads within Ouahigouya with a length of about 10 km, paving of about 20 km of earth rural roads, in addition to one mobile weighing station and two toll stations and installation of about 6 agricultural products markets sheds. The Project also includes the necessary drainage facilities, safety measures and lighting, and environmental protection measures in addition to consultancy services for the review of the detailed engineering design and supervision of construction, institutional support, financial audit and land acquisitions.
The total cost of the project is estimated to be about FCFA 44.093 billion, equivalent to about KD 23.037 million of which about KD 17.075 million are in foreign currency representing about 74% of the total cost. The loan, for KD 4.5 million, will cover about 20% of the total project cost, in addition to the financing of the Saudi Fund in the amount equivalent to about KD 4.412 million representing 19% of the total project cost and BADEA in the amount equivalent of KD 4.412 million representing 19% of the total project cost and OFID in the amount equivalent to about KD 5.588 million representing 24% of the total project cost while the balance and any cost over-runs that may occur would be covered by the Government of Burkina Faso.
The Loan matures over a period of 25 years including 5 years grace period, and will be amortized in 40 semi-annual installments, the first of which will be due on 1st date on which any interest or other charge on the Loan shall 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.
The signing of this Loan brings to 18 the number of loans accorded by Kuwait Fund to Burkina Faso, where the Fund previously provided 17 loans totaling about 62.133 million Kuwaiti Dinars, to participate in the financing in projects in various sectors. Furthermore, the Fund has extended two technical assistances with a total amount of KD 214 thousand, in addition to two Grants allocated by the Government of the State of Kuwait with an amount of about KD 3.594 million.