The Kuwaiti government, represented by the Kuwait Fund for Arab Economic Development (KFAED), has a signed a deal to loan 17 million Kuwaiti Dinars ( $60 million) to aid the expansion and development of the Egyptian natural gas distribution grid.
In the presence of Prime Minister Hesham Qandil, the Minister of Planning and International Cooperation Ashraf El-Arabi, signed the loan agreement with Abdel Wahab El-Badr, the general director of KFAED. Mohamed Shoeib, chairman of the Egyptian Holding Company for Natural Gas (EGAS), signed implementation side of the agreement with El-Badr.
The loan is to be settled over 21 years, with a four-year grace period. The Egyptian government is to settle the debt over 34 semi-annual instalments, at an annual interest rate of 2.5 per cent, in addition to 0.5 per cent for administrative fees.
The signing ceremony was attended by Minister of Petroleum Osama Kamal, the governors of Cairo and Giza, Osama Ahmed and Ali Abdel Rahman, along with the Kuwaiti ambassador to Egypt, Rashid Al-Hamad.
This loan agreement is the 36th from the KFAED to the Egyptian government, El-Badr told the Kuwait News Agency.
The loan will contribute to funding the second phase of the expansion of the natural gas distribution grid in Cairo and Giza.
Kamal told reporters that the expansion project aims to deliver natural gas to up to 500,000 citizens in Cairo and Giza.
The project involves the construction of six stations to adjust gas pressure, with a total capacity of 450 cubic metres per hour, as well as extending low pressure distribution lines.
The government plans to use alternatives to natural gas in commercial and industrial activities, and household use. The plan targets pollution reduction and alleviating the burden on government funds, which have been strained by subsidising the price of Liquid Petrol Gas (LPG), most commonly used in Egyptian households.
With the signing of this loan agreement, the total amount of KFAED loans to Egypt since 1964 has reached $2.2 billion, according to KFAED officials. Kuwaiti loans have contributed to funding several projects in various sectors including electricity, industry, transportation, sewage, water and sanitation.
