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Signing of a Loan Agreement in the Amount of KD 3,000,000 for the participation in the financing of the Mangoky River Bridge Project in the Republic of Madagascar
A Loan Agreement between the Republic of Madagascar 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 3.0 Million Kuwaiti Dinars (equivalent to about US$ 10.0 Million), to the Republic of Madagascar, to participate in the financing of the Mangoky River Bridge 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 Madagascar, by Her Excellency Fonintaslama Andriambollona - Minister of Finance and Treasury , 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 to meet the demand on passenger and goods transport, and to ease traffic movement for the marketing of agricultural products and enhancement of tourism, which would contribute towards decreasing transport costs and reducing travel time, thus developing the transport sector and supporting the economic and social development within the Country.
The Project consists of construction works for building a pre-stressed concrete bridge with a length of 880 meters and a width of 7 meters, in addition to two sidewalks with a width of 1.35 meters on each side. The Project also consists of construction works for building approach roads with a total length of about 7 kilometers inclusive of asphalt works and drainage works, and this is in addition to social works, and safety and environmental works. Also, the Project includes the consultancy services for the review of detailed design and supervision of construction, institutional support, financial audit, and land acquisitions.
The total cost of the Project, including physical and price contingencies, land acquisitions, taxes and charges, and interest during the implementation period, is estimated at about 244.8 Billion Malagasy Ariary, equivalent to about 21.818 Million Kuwaiti Dinars, of which about 168 Billion Malagasy Ariary, equivalent to about 14.977 Million Kuwaiti Dinars, is in foreign currency, representing about 68.6% of the total cost of the Project. The Fund's Loan in the amount of 3.0 Million Kuwaiti Dinars will cover about 14% of the total cost of the Project. In addition to the Fund's participation in the financing of the Project, the Saudi Fund for Development shall participate in the financing in an amount equivalent to US$ 20.0 Million; the OPEC Fund for International Development (OFID) shall participate in the financing in an amount equivalent to US$10.0 Million; and the Arab Bank for Economic Development in Africa (BADEA) shall participate in the financing in an amount equivalent to US$ 20.0 Million, while the Government of the Republic of Madagascar 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 7th Loan extended by the Kuwait Fund to the Republic of Madagascar, as the Kuwait Fund has previously extended 6 Loans to the Republic of Madagascar, to finance projects in various sectors, with a total amount of approximately 17.206 Million Kuwaiti Dinars (equivalent to about US$ 58.5 Million). The Kuwait Fund has also provided one Technical Assistance with an amount of about 130,000 Kuwaiti Dinars (equivalent to about US$ 442,000), for the preparation of Technical Feasibility Studies for the Soanierana Ivongo – Mananara Road Project, and which Technical Assistance has been consolidated with the loan that was extended for the said project.