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Signing of a Loan Agreement for the participation in the financing of the Extension of Mangochi Potable Water Supply Project in the Republic of Malawi
A Loan Agreement between the Republic of Malawi and the Kuwait Fund for Arab Economic Development has been signed today in Sharm El-Sheikh, Arab Republic of Egypt, on the sideline of the "Africa 2018 Forum", whereby the Fund will provide a Loan in the Amount of 5.0 Million Kuwaiti Dinars (equivalent to about US$ 17.0 Million), to the Republic of Malawi, to participate in the financing of the Extension of Mangochi Potable Water Supply Project. 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 the Government of the Republic of Malawi, by Her Excellency Caroline Bawanall - Mussa - Malawi Ambassdor to Egypt, while the Loan Agreement was signed on behalf of the Kuwait Fund for Arab Economic Development, by Mr. Abdulwahab Al-Bader, Director-General of the Fund.
The Project aims at meeting drinking water demand, contribute to improvement of general health, and improving the overall environmental performance in Mangochi District and reduce losses, and that by expanding of Mangochi water supply system to supply potable water to current population estimated at about 50,000 inhabitants and capable to satisfy about 93,000 inhabitants by Year 2036.
The Project consists of raw water extraction facilities from Lake Malawi, purification plant with production capacity of about 13,500 m3/day, purified water pumping station with capacity of about 480m3 / hr, storage tanks capacity of 4300 m3 and distribution network including materials for house connection and pre-paid meters and consultancy services.
The total cost of the Project, including physical and price contingencies, taxes and charges, and interest during the implementation period, is estimated at about 15.5 Billion Malawian Kwacha, equivalent to about 6.3 Million Kuwaiti Dinars, of which about 12 Billion Malawian Kwacha, equivalent to about 4.9 Million Kuwaiti Dinars, is in foreign currency, representing about 77% of the total cost of the Project. The Fund's Loan in the amount of 5.0 Million Kuwaiti Dinars will cover about 79% of the total cost of the Project, while the Government of the Republic of Malawi shall cover the remainder of the Project costs and any increase in the cost of the Project.
The Loan shall be for a period of 28 Years, including a grace period of 4 Years, and shall be repaid in 48 semi-annual installments, the first of which will be due on the first date on which interest or other charges will fall due, pursuant to the Loan Agreement, after the expiration of the said grace period. The Loan bears an interest rate of 1.0% per annum, in addition to a rate of 0.5% per annum to meet administrative costs and other expenses incurred in the implementation of the Loan Agreement.
This Kuwait Fund's Loan represents the 8th Loan extended by the Kuwait Fund to the Republic of Malawi, as the Kuwait Fund has previously extended 7 Loans to the Republic of Malawi, to finance projects in the communications and transport sectors, with a total amount of approximately 24.520 Million Kuwaiti Dinars (equivalent to about US$ 83.368 Million). The Kuwait Fund has also provided one Technical Assistance with an amount of about 219,000 Kuwaiti Dinars (equivalent to about US$ 744,600), for the preparation of the Feasibility Study and Preliminary Engineering Designs of Rural Roads, which has been consolidated with the loan that was extended for the said project. The Kuwait Fund has also provided the Republic of Malawi with a Grant for the financing of the preparation of a Study for Land Resettlement, in the amount of about 30,000 Kuwaiti Dinars (equivalent to about US$ 102,000).