MPs have unanimously approved new funding provisions amounting to $80 million for the Al Dur Independent Water and Power Project in Bahrain, reports Zawya.
The government has urgently proposed amendments to the funding agreement between itself and the Islamic Solidarity Fund for Development. The changes involve shifting the loan's calculation format from the now-suspended London Interbank Offer Rate (LIBOR) to the US Federal Secured Overnight Financing Rate (SOFR).
Electricity and Water Affairs Minister Yasser Humaidan, who oversees the Electricity and Water Authority (EWA), emphasized the necessity of this change to prevent any delays in loan payments as the Al Dur expansion progresses.
“The expansion project for distribution networks should be complete within four years and we don’t want it stalled because the old calculation format has been suspended since September last year,” he said.
“The loan is the EWA responsibility and is being paid by it solely even if the agreement is with the government.“The EWA is self-dependent and has to finance its projects from its own revenues and over the past four years we have managed to significantly reduce costs deficits through more effective approaches, technological advancements and collecting owed amounts.”
Strategic Thinking Bloc spokesman Khalid Bu Onk called for subsidised rates for extended families living in a single home with multiple meters rather than limiting subsidies to one meter.
“Subsidies and related provisions come from the government not the EWA,” said Mr Humaidan.
“We are speaking about production and distribution of water and electricity,” he added.
Meanwhile, Ahmed Al Salloom, chairman of Parliament's financial and economic affairs committee, noted that all agreements involving LIBOR would be gradually transitioned as per the government’s plan.
