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Signing of a Loan Agreement for the financing of the Multipurpose Development Project for Ethnic Minorities in Poor Communes in Xin Man District (Ha Giang Province) in the Socialist Republic of Vietnam
A Loan Agreement was signed today in Hanoi between the Socialist Republic of Vietnam and Kuwait Fund for Arab Economic Development whereby the Kuwait Fund extends a loan in the amount of KD4,000,000 /- (equivalent to about US$13.6 million) to assist in the financing of the Multipurpose Development Project for Ethnic Minorities in Poor Communes in Xin Man District (Ha Giang Province) 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 Mr.Tran Xuan Ha Vice 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 Dr. Adnan Al-Ahamad, Ambassador of the State of Kuwait to the Socialist Republic of Vietnam and Mr. Waleed Al-Bahar, Regional Manager for East South Asia & Pacific Countries of Kuwait Fund.
The Project aims to enhance the economic and social development in Xin Man District, which falls within "Ha Giang" Province, by constructing and developing the essential infrastructure to improve the traffic conditions, and to effectively use the water resources in the Project area, to restructure the local economy, and to contribute to poverty reduction.
The Project shall include the construction works for rural roads and agricultural irrigation system. In addition, the Project shall include the consultancy services and bidding documents, and supervision of construction, Project management services auditing and all required insurance, and compensations for land acquisitions.
The total cost of the Project is estimated at about 464 billion Vietnamese Dong, equivalent to about KD 6.1 million, of which about 63.6 billion Vietnamese Dong will be in foreign currency, equivalent to about KD 0.84 million and representing about 13.7 % of the total cost of the Project. The Loan provided by the Fund of KD 4.0 million, will cover about 65.4% 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 4 years grace period, and will be amortized in 40 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 15 loans to the Socialist Republic of Vietnam, as the Fund already provided 14 loans with a total amount of about KD 49.7 million (equivalent to about US$ 168.98 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.