A Loan Agreement was signed today in Lusaka, Republic of Zambia, during the African Development Bank 2016 Annual Meetings, between Burkina Faso and Kuwait Fund for Arab Economic Development whereby the Kuwait Fund extends a loan in the amount of KD. 7,000,000/- (equivalent 23.8 million US$) to assist in the financing of the Ouahigouya - Djibo Road Project in Burkina Faso.
The Loan Agreement was signed on behalf of Burkina Faso by His Excellency M. Edith Yaka , Minister of Economy , 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 Mr. Thamer Al-Failakawi, Regional Manager for West African Countries at the Fund.
The Project aims to support the economic and social development and the poverty alleviation program in the North and Sahel Regions of Burkina Faso by improving their links with the Capital Ouagadougou and the remaining regions of the Country in all weather conditions, to improve the exploitation of their agricultural products and reduce its transport cost and time, and to facilitate people's access to markets and social services. The Project will also assist in the integration of the International road network with neighboring countries Niger and Mali by facilitating and reducing travel distance for transit traffic.
The Project consists of construction works to attain an all-weather asphalted road of an approximate length of 115 km and a width of 7 meters with 1.5 m paved shoulders on each side, between Ouahigouya and Djibo, in addition to the construction of urban asphalted roads in Djibo with an approximate length of 10 km, with a width of 8 meters and 2 m shoulders on each side.
The Project includes, in particular, the following components:
- Earthworks, paving layers, drainage facilities, and safety measures and environmental protection works.
- Consultancy services for the revision of tender documents and for the supervision of construction.
- Institutional Support for the Project Implementation Unit and Directorate General of Roads, including procurement of three 4x4 vehicles, office equipment and training of about 20 engineers and technicians.
- Land acquisition and compensations.
The Project is expected to be completed by end 2019.
The total cost of the Project is estimated at about 50.668 billion FCFA, equivalent to about KD 24.847 million, of which about KD 20.959 million will be in foreign currency and representing about 84% of the total cost of the Project. The Fund's Loan will cover about 28% of the total cost of the Project, or of about 84% of the foreign exchange component of the costs 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 instalments, 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 concluding this agreement, it will be the seventeenth Loan that the Fund provided to Burkina Faso, where the Fund previously provided sixteenth loans amounting to about 55.895 million Kuwaiti Dinars equivalent to about 190 million U.S. Dollars for financing projects in different sectors. In addition, the Fund has also provided Burkina Faso with two Technical Assistance of about 214,000 Kuwaiti Dinars (equivalent to about 728 thousand United States Dollars) for financing feasibility studies in transport and irrigation sectors.