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Signing of a Loan Agreement for the participation in the financing of the Infrastructure for Rural Housing Project (Part Two) in the Republic of Uzbekistan
A Loan Agreement was signed today in Tashkent between the Republic of Uzbekistan and the Kuwait Fund for Arab Economic Development, whereby the Fund will provide a Loan in the Amount of 9.0 Million Kuwaiti Dinars (equivalent to about US$ 30.6 Million), to the Republic of Uzbekistan, to participate in the financing of the Infrastructure for Rural Housing Project (Part Two) in the Republic of Uzbekistan. 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 Government of the Republic of Uzbekistan, by His Excellency Mr. Odilbek Isakov, Deputy Minister of Finance, while the Loan Agreement was signed on behalf of the Kuwait Fund for Arab Economic Development, by Mr. Ghanem Sulaiman Al-Ghenaiman, Deputy Director-General of the Fund.
The Project aims to improve the quality of life in the rural areas of Uzbekistan by expanding and construction of rural housing, with needed engineering works for infrastructure and providing better services through development of social and community facilities.
The Project consist of construction of 13,312 affordable houses, improved rural housing in 6 (six) regions of Uzbekistan; namely: The Republic of Karakalpakstan, Kashkadarya, Samarkand, Surkhandarya, Tashkent and Fergana. The Project comprises of the related engineering works for infrastructure of water supply, power supply, gas supply and construction of access and internal roads, in addition to social, market facilities and related public infrastructure.
The total cost of the Project, including physical and price contingencies and interest during the implementation period and taxes and duties, is estimated at about 3,663.5 Billion Som, equivalent to about 126.5 Million Kuwaiti Dinars, of which about 3,490 Billion Som, equivalent to about 120.5 Million Kuwaiti Dinars, is in local currency, representing about 95% of the total cost of the Project.
The Loan shall be for a period of 24 years, including a grace period of 4 years, and shall be repaid in 40 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 1.5% 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 10th Loan extended by the Kuwait Fund to the Republic of Uzbekistan, as the Kuwait Fund has previously extended 9 Loans to the Republic of Uzbekistan, to finance projects in various sectors, with a total amount of approximately 30.7 Million Kuwaiti Dinars. The Kuwait Fund has also provided the Republic of Uzbekistan with two Technical Assistances with a total amount of approximately 528.8 Thousand Kuwaiti Dinars, in addition to a Grant in the amount of 50 Thousand Kuwaiti Dinars (equivalent to about US$170,000), in the form of Institutional Support to the Uzbekistan Fund for Reconstruction and Development.