A Loan Agreement between the Republic of Togo and the Kuwait Fund for Arab Economic Development has been signed in Lomé, whereby Kuwait Fund extends a Loan in an amount of 7 million Kuwaiti Dinars, equivalent to about US$ 23 million, to participate in the financing of the Water Supply for Kara City and the Surrounding Areas Project. It is worth mentioning that the Fund is a Kuwaiti public corporation, which relies entirely on its own resources for making loans and providing other kinds of development assistance.
The Loan Agreement was signed by His Excellency Sani Yaya – Minister of Finance of the Republic of Togo, on behalf of the Republic of Togo, and Mr. Nedhal Abdulaziz Al-Olyan, Deputy Director-General of Kuwait Fund for Arab Economic Development, on behalf of Kuwait Fund in attendance of Mr. Thamer Al-Failakwi, Regional Manager, West African countries at the Fund.
The project aims to support the socio-economic development in the city of Kara and the surrounding areas, by utilizing the source at the catchment area of Sara springs, in Bafilo city, to provide additional quantities of water to meet the increased water demand, thus improving the health and social conditions of the residence at the project area.
The Project consists mainly of civil and electromechanical works, to execute the necessary structures to collect water from Sara springs, lay the main pipelines, construction of new treatment plant, pump station, storage reservoirs, distribution networks, house connections and stand pipes. The project also includes the consulting services, institutional support, and land acquisition.
Total cost is estimated about 19.207 billion CFA Franc, equivalent to about KD. 9.415 million of which about 12.941 billion CFA Franc, equivalent to about KD. 6.344 million and representing about 67% of the total costs, are in foreign currency. The Fund's Loan will cover about 74.4% of the cost 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 1st date 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% 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, it will be the 9th Loan that the Fund provided to Togo, where the Fund previously provided eight loans to finance projects in various sectors amounting to about KD 28 million. In addition, the Fund has also provided Togo with two Technical Assistance of about 226,000 Kuwaiti Dinars to finance the preparation of the technical and economic feasibility studies of two projects. The Fund also has extended two Grants to Togo totaling of about 183,000 Kuwaiti Dinars. Moreover, the Fund has administered a State of Kuwait Grant within the framework of Goodwill Fund initiative in the amount of US$ 3 million.