Kuwait signs Sudanese dam loan

By Richard High28 August 2008

The Kuwait Fund for Arab Economic Development (KFAED) has signed a new loan agreement with the Sudanese Government to help finance construction of the controversial Merowe Dam, according to the state-funded Kuwait News Agency (KUNA).

The agreement, which was signed by Awadh Ahmad, Sudan's Economics Minister, and Abelwahab Al-Badr, KFAED's director general, will provide Sudan with an extra KWD 15 million (US$ 52.5 million) for the project.

Designed to meet growing electricity demand and reduce the cost of power production, the Merowe Dam Project is situated 350 km to the north of Khartoum on the Nile River, close to the 4th Cataract where the river divides into multiple smaller branches with large islands in between.

The dam has been strongly criticized by the UN and several development agencies for the lack of a proper environmental assessment and the displacement of the local Nubian population.

So far the Government of Sudan (US$ 575 million), the Government of China (US$ 520 million), the Arab Fund for Economical and Social Development (US$ 250 million), the Saudi Fund for Development (US$ 200 million), the Abu Dhabi Fund for Development (US$ 150 million), the Kuwaiti Fund for Economical Development (US$ 150 million), the Sultanate of Oman (US$ 106 million) and the State of Qatar (US$ 15 million) have all contributed to the cost of the dam

Funding for the dam, excluding the new loan, totals US$ 1.966 billion.

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