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Signing of a Loan Agreement for the financing of the Coastal Infrastructural Development Project for Responding to Climate Changes in Thai Thuy District (Thai Bhin Province) in the Socialist Republic of Vietnam
A Loan Agreement was signed today in Hanoi city between the Socialist Republic of Vietnam and Kuwait Fund for Arab Economic Development whereby the Kuwait Fund extends a loan in the amount of KD. 2,800,000/- (equivalent to about US$ 9.52 million) to assist in the financing of the Coastal Infrastructural Development Project for Responding to Climate Changes in Thai Thuy District in the Socialist Republic of Vietnam. It is worth mentioning that in extending its loans and grants, Kuwait Fund depends exclusively on its own resources.
The Loan Agreement was signed on behalf of the Socialist Republic of Vietnam by His Excellency Tran Xuon Ha Deputy Minister of Finance and was signed on behalf of Kuwait Fund for Arab Economic Development by Mr. Hesham Al-Waqayan, Deputy Director-General of the Fund, in attendance of His Excellency Mr. Adnan Al-Ahmad, Ambassador of the State of Kuwait to the Socialist Republic of Vietnam and Mr. Waleed Al-Bahar, Regional Manager for East, South Asia and Pacific Countries.
The Project aims to enhance the economic and social development in Thai Thuy District which falls within Thai Bhin Province, by responding to the negative effects of weather changes and subsequent floods.
The Project shall include upgrading a sea dike, constructing three river embankments, constructing a new bridge, dredging Lang river bed, constructing electricity transmission stations and underground cable system and lighting network. In addition, the Project shall include the consultancy services, the Project management, services auditing, all insurance required and the resettlements of people affected by the implementation of the Project.
The total cost of the Project is estimated at about 313.2 billion Vietnamese Dong, equivalent to about KD 4.1 million, of which about 44.1 billion Vietnamese Dong will be in foreign currency, equivalent to about KD 0.581 million and representing about 14.1 % of the total cost of the Project. The loan provided by the Fund will cover about 68.0% of the total Project cost, while the balance would be covered by the government of Vietnam.
The Loan matures over a period of 24 years including 5 years grace period, and will be amortized in 38 semi-annual instalments, the first of which will be due on the first 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 2% per annum, in addition to 0.5% per annum to cover administrative costs and other expenses incurred in the implementation of the Loan Agreement.
It is worth mentioning that by extending this loan, the Fund will have provided 14 loans to the Socialist Republic of Vietnam, as the Fund already provided 13 loans to the Socialist Republic of Vietnam with a total amount of about KD. 46.9million (equivalent to about US$ 159.46 million) for the financing of projects in various sectors. The Fund also provided to Vietnam a technical assistance in the amount of about KD. 84 thousand (equivalent to about US$ 285 thousand) for the study of a project in the agro-industrial sector.