Kuwait Fund loans $102m to Bahrain for transmission development
The loan was signed by H.E. Salman bin Hamad Al Khalifa, Crown Prince of Bahrain, on behalf of the government of the Kingdom of Bahrain. Mr. Waleed Sh. Albahar, acting director general of the Fund, signed the agreement on behalf of the KFAED. Attending the agreement signing was Kuwait’s Ambassador to the Kingdom of Bahrain Sheikh Thamer Jaber Al-Ahmad Al-Sabah, as well as officials from the Ministry of Finance and National Economy of Bahrain. Image courtesy KFAED
The Kingdom of Bahrain and the Kuwait Fund for Arab Economic Development (KFAED) have signed a loan agreement of KD31.3 million ($102.2 million), to contribute to the Developing 400kV Electricity Transmission Networks Project.
The loan agreement is the fourth between the Bahrain and the KFAED, and is being hailed as a crucial step in the financing of the project, which aims to reduce high currents for the safe operation of equipment and provide greater flexibility in the power network.
The project will also allow for the transfer of electricity power reliably and economically, the discharge of energy produced from the Al Dur2 Power Plant at a voltage of 400kV and raise the capacity and efficiency of electricity transmission networks in Bahrain and the exchange of electricity with the Gulf Link.
The project includes the construction of three 400/220kV substations in the Hadd, Umm Al Hassam, and Riffa areas, as well as a 400KV interconnection station in the Ras Laqrin area, which will be interconnected to Al Dur 2 Power Plant.
It also includes the installation of 400kV ground cables to connect the new terminals to the existing substations and the national network, the strengthening of the 220KV network and the necessary modifications. The project also includes consulting services.
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Financing breakdown
The total costs, including reserves and interest during implementation, amounts to approximately KD260.8 million ($851.2 million), of which about KD135.5 million ($442.3 million) is in foreign currencies, representing 52% of the total project cost.
This fourth loan is expected to cover 11.6% of the total cost of the project, which has been financed under Kuwait Government Grant No. 62/1 for $261 million, in addition to the proceeds of the first loan no. 1025 in the amount of KD29.5 million ($96.3 million) and to the proceeds of the second loan no. 1046 in the amount of KD30.3 million ($98.9 million).
Said loans form part of the Fund’s outstanding Programme for the Kingdom of Bahrain for the fiscal years 2019/2020 – 2028/2029.
This fourth loan agreement, with a term of 20 years and a grace period of four years, will be repaid in 32 semi-annual instalments, the first of which is due after the grace period. The loan carries an interest rate of 2% per annum, with an additional 0.5% per annum fee to cover administrative costs and services related to the loan agreement.
According to the Fund in a release, the loan is the 21st loan to be made to the Kingdom of Bahrain, as the Fund has already provided it 20 loans for financing projects with a total value of KD240.37 million ($784.6 million), of which KD240.21 million ($784 million) has been withdrawn.
