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Signing of a Loan Agreement for Financing the Rehabilitation of Rural Roads Project in the Republic of Tunisia
A Loan Agreement was signed today in Tunis between the Republic of Tunisia and the Kuwait Fund for Arab Economic Development, whereby the Fund will provide a Loan in the Amount of KD 30,000,000 (equivalent to about US$ 102 million), to assist in the financing of the Rehabilitation of Rural Roads Project. It is worth mentioning that the Fund depends exclusively on its own resources in providing its loans and development assistance.
The Loan Agreement was signed on behalf of the Republic of Tunisia by His Excellency Mr. Ziad Al Athari, Minister of Development, Investment and International Cooperation and was signed on behalf of the Kuwait Fund for Arab Economic Development by Mr. Abdulwahab Al-Bader, Director-General of the Fund, in attendance of Mr. Abdullah Al-Musaibeeh, Regional Manager for Arab Countries at the Fund.
The Project aims at contributing to support social and economic development of the Republic of Tunisia, and in particular to improve agricultural productions and enhancing the living standards of the farmers in the project areas, alleviating the migration rates from villages to towns, by improving and rehabilitation of about 148 nos. of rural roads(about 912 km) in 22 governorates of the country. The project aims also to reduce the production costs, saving time and providing easy access to local markets.
The project consists of rehabilitation and asphalting of about 912 km of rural roads between 5 to 7 m with shoulders (between 1 to 1.5 m) the construction of drainage works, safety and protection works, and engineering consultancy services.
The project cost estimates are about 392 million Tunisian Dinars (equivalent to about 41.4 million Kuwait Dinars), inclusive of contingencies, taxes and interest of the loan. The foreign costs estimates is about 9% due to the nature of the works.
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 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 the administrative costs and other expenses incurred in the implementation of the Loan Agreement.
By signing this Loan Agreement, the aforementioned loan will represent the thirty seventh loan provided by the Fund for financing of projects, as Kuwait Fund has already extended to the Republic of Tunisia 36 loans in various sectors with a total amount of about 223 million Kuwaiti Dinars (equivalent to about 759 million US$). In addition to the above, the Fund had extended to the Republic of Tunisia 2 Technical Assistance, the total value of them is about KD 400,000 (equivalent to about 1.7 million US$) for the preparation of technical and economic feasibility studies of various projects.