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Signing of a Loan and Project Agreement for K.D. 10.0 Million for Financing the Expansion of Medium Voltage Networks Project in Southern Eastern Mauritania
A Loan Agreement was signed today in Rabat, Kingdom of Morocco, between the Government of the Islamic Republic of Mauritania and Kuwait Fund for Arab Economic Development (the Fund) during the meeting of Arab Financial Institutions and the 46 Annual Meeting of the Board of Governors of the Arab Fund for Economic and Social Development, whereby the Fund will make a loan in the amount of Ten Million Kuwaiti Dinars (KD 10 million), equivalent to about U.S.$ 34 Million, to assist in financing the Expansion of Medium Voltage Networks Project in Southern Eastern Mauritania. An Agreement (the Project Agreement) concerning arrangements for implementation of the Project, was also signed between the Fund and Mauritania Electricity Company, which is undertaking the implementation of the Project. 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 Islamic Republic of Mauritania by His Excellency Al-Mukhtar Wald Ajai, Minister of Economy and Finance, while the Project Agreement was signed on behalf of Mauritania Electricity Company by His Excellency Mohamed Salim Wald Ahmed, the General Manager of Mauritania Electricity Company. His Excellency Mr. Abdulwahab Al-Bader, Director-General of Kuwait Fund for Arab Economic Development signed both the Loan Agreement and the Project Agreement on behalf of Kuwait Fund.
The project aims at supporting economic and social development in the project areas by making electrical energy available to the inhabitants living along Senegal River bank in the Southern Eastern regions of the Islamic Republic of Mauritania in Gorgol and Guidimaka regions. This electrical energy produced from the Senegal River Basin Development Organization (OMVS) dams will be transmitted to the project region.
The Project consists of: extending a loop of about 595 km of medium voltage (33kV). The loop is composed of three sections: Selibaby-Kehide, Kehide-Gouray, and Gouray-Selibaby, together with low voltage networks (400 volts) and consumers' connections. Furthermore, the project includes institutional support for Project Management Unit, and required consulting services, as well as land acquisition.
The total cost of the Project including contingencies and interest during construction is about Mauritanian Ouguiya 13.9 Billion (equivalent to about K.D. 12.6 Million), equivalent to about Mauritanian Ouguiya 12.5 Billion (equivalent to about K.D. 11.3 Million) is in foreign currencies. Kuwait Fund loan amounting to K.D. 10 Million covers about 79.4% of the project cost, whereas the rest of the project cost will be borne by the Government of Mauritania, in addition to any cost over-runs that may arise in the future.
The Loan is made for a term of 25 years, including a grace period of 5 years, and will be amortized by 40 semi-annual installments, the first of which will be due on the first date on which any interest or other charges on the loan shall fall due after the elapse of the grace period. Loan will bear interest at 1.5% per annum in addition to a charge of 0.5% for meeting administrative costs and the expenses of implementation of the Loan Agreement.
The aforementioned loan represents the twentieth loan made by the Fund for financing projects in Mauritania, as Kuwait Fund has already made nineteen loans to the Islamic Republic of Mauritania to assist in financing projects in various sectors with a total amount of about K.D. 113.3 Million (equivalent to about US$ 385 Million) . The Fund has also provided grants and technical assistance allocations to Mauritania with a total amount of about K.D. 1.4 Million (equivalent to about US$ 4.8 Million). The Fund has also administered four grants provided by the Government of the State of Kuwait to Mauritania amounting to about K.D. 4 million (equivalent to about US$ 54.4 Million) to assist in financing various developmental projects.