A Loan Agreement between Kuwait Fund for Arab Economic Development and The Republic of Sudan has been signed today inKhartoum whereby Kuwait Fund extends a Loan in an amount of K.D. 25million equivalent to about US$ 85 million to participate in the financing of the Electrification of the Eastern Provinces Project.

The Loan Agreement was signed by H.E. Ali Mahmood Abdel-Rasool theMinister of Finance, on behalf of the Republic of Sudan, and Mr. Abdulwahab Al-Bader, Director-General of Kuwait Fund for Arab Economic Development, on behalf of Kuwait Fund.

The objective of the Project is to support the development of Eastern Sudan, through the provision of more electric power to the eastern provinces and make it available to about 660 new consumers which will contribute to the economic and social development in the said provinces.

The Project consists of the construction, supply and installation of diesel generation units in the isolated areas from the grid in the Red Sea and Kassala provinces in order to meet their forecast demand, a 110 KV transmission line and transformation capacity to reinforce the high voltage transmission and meet the forecast demands in the three provinces and medium and low voltage distribution networks and transform stations in the said provinces. It also includes, the engineering services and supervision of construction. The Project is expected to completed by 2015.

The total cost of the Project is estimated at about 654.2 million Sudanese Pounds, equivalent to about K.D. 71.3 million of which about K.D. 541 million Sudanese Pounds, equivalent to about K.D. 59 million and representing about 82.7% of the total costs, are in foreign currency.  The loan which is the first of two loans will cover about 35% of the total cost of the project whereby the Government of Sudan will bear the remaining cost.

The Loan matures over a period of 25 years including 4 years grace period, and will be amortized in 42 semi-annual installments, the first of which will be due on 1st date on which any interest or other charges on the Loan becomes due after the elapse of the above mentioned grace period. The Loan bears an interest rate of 2% per annum, in addition to 0.5% per annum to cover administrative costs and other expenses incurred in the implementation of the Loan Agreement.

The signing of this Loan brings to 24 the number of loans extended by Kuwait Fund to The Republic of Sudan, where the Fund previously provided 23 loans totaling about 202.4 million Kuwaiti Dinars, equivalent to about US$ 688 million to participate in the financing in projects in different sectors in addition to three grants totaling about 333 thousands Kuwait Dinars, equivalent to about US$ 1.2 million. The Fund also administered the Government of Kuwait Grant of 7 million U.S. Dollars equivalent to KD. 2 million thru the Goodwill Fund and another Government Grant of about 50 million U.S. Dollars equivalent to KD. 14.1 million to finance projects in the Health and Education sectors in the Eastern Provinces of Sudan.