Ghana and the Kuwait Fund for Arab Economic Development have signed a loan agreement for an amount of $23.8 million as financing of the rehabilitation of Dome-Kitase road project.
The Loan Agreement was signed on behalf of the Government of Ghana by the Minister of Finance, Ken Ofori-Atta, while the Deputy Director-General of the Fund, Nedhal Alolayan, signed on behalf of the Kuwait Fund for Arab Economic Development.
The project aims at supporting the economic and social development in the country by providing reliable year-round land and transportation in the southern part of the country.
The project will improve connectivity and accessibility to places of work and social services for the inhabitants of the various towns and settlements located along the road path and will reduce the travel time and the vehicle operation cost.
The rehabilitation of the road is also expected to enhance investment in agricultural activities, development of light industries and is expected to create jobs and promote new business opportunities in this part of the country.
The total cost of the project, including taxes, interest during construction, land acquisition and price contingencies during the implementation period, is estimated at GH¢179 million.
The loan shall be for a period of 28 years, including a grace period of 4 years, and shall be repaid in 40 semi-annual installments, the first of which will be due on the first date on which interest or other charges will fall due, pursuant to the Loan Agreement, after the expiration of the said grace period.
The loan bears an interest rate of 1% per annum, in addition to a rate of 0.5% per annum to meet administrative costs and other expenses incurred in the implementation of the agreement.
The loan represents the 11th loan extended by the Kuwait Fund to the country.