KFAED Inks USD 114.2 Mln-Loan Agreement With GCC Interconnection Authority

(MENAFN- Kuwait News Agency (KUNA)) KUWAIT, June 13 (KUNA) -- The Kuwait Fund for Arab Economic Development (KFAED) signed a Thursday the second KD 35 million (about USD 114.2 million) loan agreement with the Gulf Cooperation Council Interconnection Authority (GCCAI).
The loan aims to finance the development of the GCC electricity grid and LINK it to the southern Iraq electricity network.
The agreement was signed by Kuwait Minister of Foreign Affairs and KFAED Board Chairman Abdullah Al-Yahya and the CEO of the GCCAI Ahmed Al-Ibrahim at the KFAED headquarters in Kuwait, in the presence of the GCC Secretary-General Jasem Al-Budaiwi.
Following the signing ceremony, Al Budawi commended the agreement, noting that the GCC countries are making great efforts to towards integration at all levels. He added that this project will benefit the GCC countries and Iraq.
KFAED signed a first loan agreement with GCCAI in March 2022 at a value of KD 35 million Kuwaiti (about 114.2 million dollars).
For his part, KFAED Acting Director General Waleed Al-Bahr said the GCC electrical interconnection project has great technical and economic benefits for all member states.
The project will increase the capacity and efficiency of the electrical networks of member states, he clarified.
Al-Bahr noted that Kuwait will be one of the largest beneficiaries of the project, as the capacity of the electricity network will be increased to 2,500 megawatts to meet the needs of the National Electricity Transmission Grid of Kuwait.
He stated that this agreement would help support the southern Iraq network with no less than 500 megawatts from the GCC interconnection system.
The project aims to strengthen the connectivity of the national electrical networks of the Gulf States that are members of the Gulf Interconnection Authority and increase their reliability to ensure the sustainability of electrical energy at all times, he indicated.
Al-Bahr pointed out that the project will contribute to achieving a number of sustainable development goals and is expected to be complete in 2026.
He disclosed that the project to expand the GCC network to Kuwait and then to the southern Iraq network would cost KD 245 million (about USD 800 million) to which the KFAED contributed to KD 70 million (about USD 228.4 million), representing 28 percent of the total costs.
Al-Bahr unveiled that KFAED's two loans repayment time is 12 years, including a grace period of three years and the interest rate is 1.5 percent annually, in addition to a fee of 0.5 percent annually to cover the costs of management and services for implementing the loan agreement. They will be repaid in 18 semi-annual installments, he said.
In Baghdad, the Iraqi Minister of Electricity Ziad Ali praised the KFAED second loan agreement with the GCCAI.
Minister Ali described the signing of the agreement as a strategic step towards enhancing the stability of the electrical network in southern Iraq.
"It also embodies the fruitful Iraqi-Gulf cooperation in the energy sector," the Iraqi news agency quoted Minister Ali as saying.
He said that the project will contribute to improving energy efficiency and meet Iraq's energy needs. (end)
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