Kuwait Fund signs KD 4m loan agreement with Vietnam

A loan agreement was signed Tuesday in Hanoi between Vietnamese government and Kuwait Fund for Arab Economic Development (KFAED) whereby the Kuwait Fund will make a loan in the amount of KD 4 million (about USD 13.6 million) to finance the irrigation infrastructure upgrading in Hai Hau District project in Vietnam.
The agreement was signed on behalf of the Socialist Republic of Vietnam by Mr. Truong Chi Trung, deputy minister of finance, and was signed on behalf of Kuwait Fund for Arab Economic Development by Mr. Hesham Al-Waqayan, Deputy Director-General of the Fund, in attendance of Hamad Al-Jutaili, Ambassador of the State of Kuwait to Vietnam and Mr. Waleed Al-Bahar, Regional Manager for East South Asia & Pacific Countries of Kuwait Fund, the KFAED said in a press release issued Tuesday.
The project aims at contributing to the socio-economic development in Hai Hau Town in addition to 12 Villages in District Hai Hau in Nam Dinh Province in the Republic of Vietnam through providing adequate irrigation and agricultural drainage services, and henceforth, increasing and sustaining agricultural production, thus contributing towards poverty reduction for the project area inhabitants totaling approximately 105,000 capita as well contributing to national food security.
The project comprises the civil and mechanical engineering works required for rehabilitating and upgrading Ninh My and Doi Canals with a view to provide adequate quantities of irrigation water and agricultural drainage for approximately 5,900 hectares 7,750 hectares of agricultural land respectively.
The work covers Ninh My and Doi Canals side slope lining with masonry stone with total lengths of approximately 10 kilometers and 15 kilometers respectively; dredging, enlarging, and re-aligning the canal section; construction of approximately 6 reinforced concrete box-section culverts, in addition to all complementary work. Moreover, the project includes land acquisition, institutional support and consultancy services. The Project is expected to be completed by the end of the year 2018.
The total cost of the Project is estimated at about 392.78 billion Vietnamese Dong, equivalent to about KD 5.44 million, of which about 16.14 Vietnames Dong, equivalent to about KD 0.22 million will be in foreign currency and representing about 4.1 of the total cost of the project. The loan provided by the Fund will cover about 73.6 of total project cost, while the balance would be covered by the government of Vietnam.
The loan is made for a term of 24 years, including a grace period of 4 years and the loan will be amortized in 40 semi-annual installments, the first of which shall fall due on the first date on which interest and other charges on the loan shall fall due after the elapse of the grace period. The loan will bear interest at the annual rate of 2 percent in addition to a loan administration charge at the annual rate of 0.5 percent.
It is worth mentioning that by extending this loan, the Fund will have provided 12 loans to the Socialist Republic of Vietnam, as the Fund already made 11 loans to the Socialist Republic of Vietnam with a total amount of about KD.39.5 million (equivalent to about USD 134.4 million) for the financing of projects in various sectors.
The Fund also provided to Vietnam a technical assistance in the amount of about KD. 84 thousand (equivalent to about USD 285 thousand) for the study of a project in the agro-industrial sector.