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| Tuesday, May 28,2013 |

Signing A Loan Agreement In The Republic Of Yemen

A Loan Agreement was signed today in Sana'a between the Republic of Yemen and Kuwait Fund for Arab Economic Development, whereby the Fund will provide a loan of Kuwaiti Dinars 10 million (equivalent to about U.S.$ 35 million) to assist in the financing of the Transmission and Distribution Networks Upgrading in Aden Project (Almansora-Khor Maksar Al Kusaf).

The Loan Agreement was signed on behalf of the Republic of Yemen by His Excellency Dr. Mohammed Saeed Al-Sa'adi, Minister of Planning and International Cooperation, and on behalf of the Kuwait Fund by Mr. Abdulwahab Al-Bader, Director-General of the Kuwait Fund for Arab Economic Development.

The Project aims at meeting the future demand on electricity and reducing the bottle-necks in the existing transmission and distribution networks, and upgrading the transmission and distribution lines in the Aden peninsula, the region with vital urban, commercial and industrial activities.

The Project consists of two 132 kV connecting switchgears in Al Mansoorah Substation, the extension of 132 kV double circuit ground cable from Al Mansoora to Khor Maksar, construction of a new 132/33/11 kV Substation at Khor Maksar, extension of 132 kV double circuit ground cables from Khor Maksar Substation to Khusaf Substation site, and the construction of a new 132/33/11 kV Substation at Khusaf. The total cost of the project, including the contingencies, taxes and custom duties, is estimated at about Yemeni Riyal 14.6 Billion equivalent to about Kuwaiti Dinars 20 million, of which the foreign cost is about Yemeni Riyals 13.2 billion, equivalent to about KD. 18.1 million which represents 91% of the total costs of the project. The Fund's loan covers about 50% of the total project cost while the Government of Yemen will cover the remaining costs of the Project. The Loan shall be for a period of 25 years including a grace period of 5 years. The Loan will be amortized on 40 semi-annual installments, the first of which shall 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. The Loan bears interest at 1.5% per annum, in addition to 0.5% per annum to cover administrative and other expenses to be incurred in the implementation of the Loan Agreement. By concluding this agreement the Fund would have provided the Republic of Yemen 34 loans considering that it had already provided 33 loans totaling about KD. 119 million (equivalent to about US$ 405 million) to finance Projects in various sectors, in addition to 16 grants totaling about KD. 2.8 million for financing feasibility study and institutional support of various projects and 5 Technical Assistances totaling about KD. 263 thousand also for financing the feasibility study of various projects. In addition, the Government of the State of Kuwait had also extended 4 Grants, totaling about KD. 19 Million (equivalent to about US$ 66.5 Million).

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