Kuwait Fund For Arab Economic Development

03/31/2019 | Press release | Distributed by Public on 03/31/2019 02:59

Signature of Loan Agreement of Kuwaiti Dinars 5 Million for the Financing of the Expansion of Power Generation, Transmission and Distribution Networks Project in the Republic[...]

A Loan Agreement was signed today in the city of Paramaribo between the Republic of Suriname and Kuwait Fund for Arab Economic Development, whereby Kuwait Fund will make a loan of Kuwaiti Dinars (K.D.) 5 million (equivalent to about U.S.$ 17 million) to assist in financing the Expansion of Power Generation, Transmission and Distribution Networks Project. A Project Administration Agreement relating to the Project was also signed between the Suriname National Electricity Company (EBS) and Kuwait Fund. 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.

Her Excellency Mrs. Roline Samsoedien, the Acting Minister of Finance signed the Loan Agreement on behalf of the Republic of Suriname, while Mr. Marcel Eijindhoven Msc, Chief Technical Officer and Mr. Adnan Ismanto, Chief Financial Officer of Suriname National Electricity Company (EBS) signed the Project Agreement on behalf of the said Company . Mr.Marwan Al-Ghanem, Deputy Director-General for Operations of Kuwait Fund for Arab Economic Development signed both the Loan and Project Agreements on behalf of Kuwait Fund.

The project aims at increasing the welfare and improving the living conditions of the population of Suriname and also improving the competitiveness of the domestic producers and exporters. This will be achieved by expanding and upgrading power generation, transmission and distribution of the power systems to meet growing demands for electricity.

The project includes all necessary civil works, together with procurement, supply, and installation of electromechanical equipment to construct Paranam Power Station, and expansion and upgrading of the associated transmission network (Paranam Power System, EPAR). The project also includes all necessary civil works, together with procurement, supply, and installation of electromechanical equipment to expand the existing Clara Polder power station and expansion and upgrade of the associated transmission and distribution network (Nickerie power system, ENIC). In addition, the project will include the required consultancy services, environmental and social impact studies, project management and financial audit. The project is expected to be completed by the end of the year 2023.

The total cost of the Project is estimated at about Suriname Dollars 1.1 billion, equivalent to about K.D. 44.6 million, of which about Suriname Dollars 1.1 billion, equivalent to about K.D. 41.4 million, is expected to be in foreign exchange, representing about 93% of the total cost of the Project.

The term of Kuwait Fund Loan is 20 years, including a grace period of 4 years. The Loan is to be amortized in 32 semi-annual installments, the first of which will be due on the first date on which interest or other charges on the loan will be due, in accordance with the Loan Agreement, after the expiry of the above-mentioned grace period. The Loan bears interest at the rate of 2.5% per annum in addition to a service charge of 0.5% per annum for meeting administrative costs and the expenses of implementing the Loan Agreement.

It is worth mentioning that by extending this loan, the Fund and the Republic of Suriname mark the start of their development cooperation.