19/02/2007: Signature of Loan Agreement for K.D. 2,500,000 for the Financing of the Agricultural Feeder Roads Project in Grenada

A loan agreement was signed today in St. George's between Grenada and Kuwait Fund for Arab Economic Development whereby the Fund will provide a loan of two million five hundred thousand Kuwaiti Dinars (equivalent to about Eastern Caribbean dollars 22.5 million) to assist in financing the Agricultural Feeder Roads Project.

The Loan Agreement was signed by His Excellency Mr. Anthony Boatswain, Minister of Finance, on behalf of Grenada, whereas Mr. Hesham Ibrahim Al-Waqayan, Deputy Director-General of Kuwait Fund for Arab Economic Development signed the Loan Agreement on behalf of the Fund.

The purpose of the Project is to enhance the social and economic development of Grenada, reduce vehicle operating cost and facilitate transport of agricultural produce and passengers in all Parishes of the Island through the rehabilitation of agricultural feeder roads that are safe to use in all weather conditions. 

The Project involves civil engineering works for the reconstruction and rehabilitation of about 50 kilometers of the agricultural feeder roads. The work involves sea defences, site preparation, earthworks, pavement layers, drainage structures, bridges and road safety works. As well as, consultants' services for the preparation of detailed designs, tender documents and supervision of construction. In addition, the Project includes, Institutional support for the Project's Implementation Unit, including the procurement of vehicles, office furniture, computers and office equipment and supply of maintenance equipment and tools for the Farm Roads Unit. 

The total costs of the Project are estimated at about Eastern Caribbean dollars 28.53 million, equivalent to about 3.17 million Kuwaiti Dinars, of which about Eastern Caribbean dollars 27.18 million, equivalent to about 3.02 million Kuwaiti Dinars and representing about 95% of the total costs, are in foreign exchange. The Fund's Loan will cover 83% of the foreign exchange component of the costs and part of the local costs of the Project. The Project is expected to be completed by end 2009. 

The Loan is made for a term of 20 years, including a grace period of 4 years, and will be amortized by 32 semi-annual installments, the first of which will fall due on the first date, following expiry of the aforementioned grace period, when interest or other charges on the Loan will be due. The Loan will bear interest at the rate of 2.5% per annum in addition to a service charge of 0.5% to cover administrative costs and the expenses of implementing the Loan Agreement. 

With this Loan the Fund will have made five loans to Grenada totaling 10.6 million Kuwaiti Dinars (equivalent to about 95.4 million Eastern Caribbean dollars). In addition to two Technical Assistance grants totaling about 298 thousands Kuwaiti Dinars (equivalent to about 2.7 million Eastern Caribbean dollars) for financing a feasibility study in the Road and infrastructure sectors.