A Loan Agreement was signed today in Washington, D.C. on the sidelines of the 2024 Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) between the Republic of Benin and Kuwait Fund for Arab Economic Development, whereby the Fund will provide a Loan of K.D. 4.5 million to assist in the financing of the Water Supply for Bassila and Allada Cities Project.

The Loan Agreement was signed on behalf of the Republic of Benin by the Senior Minister in charge of Economy and Finance Mr. Romuald Wadagani, while the Loan Agreement were signed on behalf of the Kuwait Fund for Arab Economic Development by Waleed Al-Bahar, Acting Director General of the Fund.

The Project aims to support the socio-economic development in two cities, namely Bassila and Allada, through the expansion and rehabilitation of the existing water supply systems, to provide adequate, sustainable quantities and improved water quality, to meet the increased water demand till the year 2034, thus improving the health and social conditions of the residence at the Project Area.

The total cost of the Project is estimated at about 12.0 billion CFA, equivalent to about K.D. 6.0 million. The Kuwait Fund Loan of K.D. 4.5 million will cover about %75 of the total cost of the Project, while the Government of the Benin Republic shall cover the remainder of the Project costs and any increase in the cost of the Project. The Project implementation is expected to be completed in 30 June 2026.

The Loan is made for a term of 23 years, including a grace period of 3 years.  The Loan will be amortized in 40 semi-annual instalments, the first of which will be due on the first date on which interest or other charge on the Loan will fall due after the expiry of the said grace period.  The Loan bears interest at the rate of 1.0% per annum, in addition to 0.5% per annum to cover administrative charges and other expenses involved in the implementation of the Loan Agreement.

Upon signature of this Loan Agreement, the Fund will have provided 15 Loans to the Republic of Benin, as the Kuwait Fund has previously extended 14 Loans, to finance several Projects in the Roads and Water sectors, with a total amount of about K.D. 42.09 million, of which about K.D. 28.90 million, have been disbursed, and about K.D. 17.57 million, have been reimbursed. Furthermore, the Government of Kuwait provided the Republic of Benin a Grant with a total amount of about K.D. 1.45 million under the Kuwait Good will Fund for The Promotion of Food Security in Islamic Countries.

The signed Loan Agreement achieves parts of the Sustainable Development Goals, including: the first (No Poverty), the third (Good Health and Well-Being), the sixth (Clean Water and Sanitation), the ninth (Industry, Innovation and Infrastructure), the eleventh (Sustainable Cities and Communities), the fifteenth (Life on Land) and the seventeenth (Partnerships for the Goals).