A Loan Agreement between the Kuwait Fund for Arab Economic Development and the Government of the People's Republic of Bangladesh has been signed today in Dhaka whereby the Kuwait Fund extends a Loan in an amount of 10,000,000/- Kuwaiti Dinars equivalent to about US$ 34.2 million to participate in the financing of Improvement of Urban Roads in North Dhaka City.

The Loan Agreement was signed by H.E. Mohammad Mejbahuddin, Senior Secretary, Economic Relations Division of the Borrower's Ministry of Finance on behalf of the Government of the People's Republic of Bangladesh, and Mr. Hamad Al-Omar, Deputy Director-General of Kuwait Fund for Arab Economic Development on behalf of Kuwait Fund, in attendance of Mr. Ayad Al-Gharaballi, Assistant Regional Manager for East, South Asia and Pacific Countries.

The aim of the Project is to enhance the economic and social development of Bangladesh, through decreasing traffic congestions and accident rates, and improvement of drainage systems and pedestrian facilities of urban roads in the North of the Capital Dhaka.

The Project consists of construction works for the improvement and rehabilitation of 37 urban roads that fall within the areas of Mirpur, Mohammadpur, Vashantak, and Agargoan in the North of the capital Dhaka. The total length of these roads is approximately 80 kilometers, with varying widths that range between 3 - 53.8 meters.  The project also includes drainage facilities works, pedestrian facilities, street lighting, traffic lights and safety measures, environmental protection works, and the necessary consultancy services for the provision of the detailed engineering design and supervision of construction.  It is estimated that the project shall be completed within four years.

Total cost is estimated about 3,544 Million Taka, equivalent to about K.D. 13.364 million of which about 2,735 million Taka equivalent to about K.D. 10.314 million and representing about 77.2% of the total costs, are in foreign currency. The Fund's Loan will cover about 74.8% of the cost of the Project while the Government of Bangladesh will cover the remaining costs of the project.   

The Loan matures over a period of 25 years including 5 years grace period, and will be amortized in 40 semi-annual installments, the first of which will be due on 1^stdate on which any interest or other charge on the Loan shall fall due after the elapse of the above-mentioned grace period. The Loan bears an interest rate at 1.5% per annum, in addition to 0.5% per annum to cover administrative costs and other expenses incurred in the implementation of the Loan Agreement.

By signing this Loan Agreement, the Fund will have provided 23 loans to the People's Republic of Bangladesh, where the Fund previously provided 22 loans totaling about 152.8 million Kuwaiti Dinars, equivalent to about US$ 522.5 million to participate in the financing of projects in various sectors. The Fund also extended to the Government of the People's Republic of Bangladesh 3 technical assistances, in the total amount of about K.D. 413 thousand, to financing of feasibility studies of projects in the Transport Sector. The Fund also administered State of Kuwait Grant of US$ 10 million from the resources of Kuwait Goodwill Fund, which was established, in order to assist Islamic countries in their endeavours to achieve food security and assure the basic right to food to their people.