Kuwait signs $1.3bn deals with Bahrain

The Kuwait Fund for Arab Economic Development (KFAED), on behalf of the Kuwaiti government, signed Wednesday four agreements with the government of the Kingdom of Bahrain to finance four development projects in Bahrain through a Kuwaiti grant at a total value of USD 1.3 billion. In a press statement, the KFAED said the agreements were signed within the framework of the meeting of the Kuwaiti-Bahraini Joint Higher Committee in its Seventh Session, held here, by Kuwaiti Deputy Prime Minister and Minister of Foreign Affairs of the State of Kuwait and the Chairman of the Board of Directors of KFAED and Bahraini Minister of Foreign Affairs Sheikh Khalid Bin Ahmed Bin Mohamed Al Khalifa. As per the agreements, the KFAED will allocate a grant of USD 1.3 billion for the financing of four development projects in the Kingdom of Bahrain namely the comprehensive handicap complex project, the 400 kV transmission development project, the housing program for the Northern City and the City of Eastern Alhed and the development of Sheikh Jaber Al-Ahmad Al-Sabah (intersection of Alba and Nuwaidrat). The statement pointed out that the grant also comes in implementation of the Framework Agreement signed on 03/09/2012 between the government of the Kingdom of Bahrain and KFAED concerning the utilization of a grant of USD 2.5 billion by the government of the State of Kuwait to the Kingdom of Bahrain for the financing of development projects. The overseeing of the imbursement of the grant has been entrusted by the Government of the State of Kuwait to KFAED. The grant is being made within the framework of the Program of the Gulf Cooperation Council (GCC) for development in the member states. The KFAED noted that the comprehensive handicap complex project aims to provide a better medical and rehabilitation care and integrated psychological and therapeutic services, for all disabled people through the construction and equipping of a specialized building complex for overall disability care services, under the supervision of specialists with qualifications and competencies, in one geographical vicinity area located in the "Aali" suburb of Central province. The complex will contribute in improving the delivery of this modern social welfare service, with better disabilities care for the people with disabilities, and train them to integrate into society and the labor market, which will have a positive impact on social and economic development of the population of the Kingdom of Bahrain. The project consists of the construction of a building complex for overall disability care, comprising 10 buildings for various disability care, as well as building service faculties and public utilities, and the supply and installation of special furniture, fixtures and equipment for those buildings, and four special buses for disabled people, in addition to the engineering consulting services to review the detailed design and supervision of the implementation of the Project, expected to be completed by the end of 2014. The total cost of the project is estimated at about USD 23 million, whereas the Kuwaiti grant which amounts to USD 23 million covers 100 percent of the total cost of the project. The project grant will be paid over three years starting from 2012, the KFAED said. The second agreement provides finance to a 400 kV transmission development project which aims at reducing the short circuit current presently too high for the safe and reliable operation of the power sector equipment, thus by ensuring the security of supply in an efficient and economical way as well as providing reliable interconnection with the GCC power grids. The project consists of the design, construction, supply and installation of three 400/220 kV sub-stations and of 400 kV underground transmission lines to connect the said sub-stations and the new equipment in the existing sub-stations as well as the reinforcement of the existing 220kV network; in addition to the consultancy services and institutional support. The Project is expected to be completed by the end of 2015. The total cost of the project is estimated at about USD.740 million. The Kuwaiti grant which amounts to USD 250 million covers about 34 percent of the total cost of the project, and will be disbursed over four years starting from 2012. The third agreement is related to the housing program for the northern city and the city of Eastern Alhed. The program aims to contribute to life insurance and a safe living environment and sustainable for the low-income Bahraini citizens through the conduct of access to adequate social housing, and to provide them with better housing services in order to create a stable environment for the Bahraini family. The total cost of the program is in the amount of USD 4.6 billion, disbursed over seven years. It is expected that the Kuwaiti grant amounts to USD 890 million will finance 19 percent of the costs of the program. The fourth agreement is on financing the renovation and development of Sheikh Jaber Al-Ahmad Al-Sabah road intersection of Alba and Nuwaidrat. The project aims to contribute to the economic development in the Kingdom of Bahrain through satisfying the growing demand for passenger and cargo transport and removal of traffic jams in the areas of Sitra, Riffa and Isa Town and industrial zones and complex Aluminium Bahrain and the oil refinery in order to reduce accidents and reduce vehicle operating costs and travel time and transportation cost. The project consists of two regular interchanges construction work on the Sheikh Jaber Al-Ahmad Al-Sabah at the Alba and Nuwaidrat. The project includes the upper bridges, roads and paths services and basic conversion utility lines for natural gas, electricity, telephone, water and sewer and storm water drainage. It also includes consultancy services for the preparation of development studies of Sheikh Jaber Al-Ahmad Al-Sabah project, and services to oversee implementation. It is expected that the implementation of the project will start in the second quarter of 2013 and executed by the end of 2016. The estimated total project cost of the project is about USD 138 million to be disbursed over four years. It is expected that the Kuwaiti grant amounts to USD 138 million will finance 100 percent of the total costs of the project. The KFAED had extended to the Kingdom of Bahrain 17 Loans totaling about KD 162 million, the equivalent of about USD 591 million to finance projects in various sectors, in addition to 13 grants and technical assistance totaling about KD 34 million, equivalent to about USD 113 million to finance the preparation of the technical and economic feasibility studies for a number of economic projects in addition to finance projects in the health and education sectors.