The Arab Fund for Economic and Social Development signed two loan agreements with Sudan worth 100 million Kuwaiti dinars ($360 million) to help fund an airport in Khartoum and two dams in eastern Sudan.
“With this loan, we have secured $321 million for the new airport,” Abdel Kareem Abdalla, the head of the implementation unit of the airport, said today in an interview.
The loan agreements bring the total amount lent by the Kuwait-based fund to Sudan to 526 million dinars ($1.89 billion), according to a statement handed to reporters today in Khartoum, the capital. The country’s external debt reached $38 billion in 2010, according to the International Monetary Fund.
The loans have an annual interest rate of 2.5 percent, and will mature in 25 years, according to the statement. Half of the funds are earmarked for the airport, while 50 million dinars loan will be used to finance two dams and two hydroelectric power stations, according to the statement.
Sudan has been classified by the U.S. as a sponsor of terrorism and been subject to economic sanctions since 1997. The country relies on investments and loans from Persian Gulf countries, China and India.
The new airport, which Khartoum hopes will become a regional hub, will cost about $2 billion, Abdalla said. It will be able to handle 6.5 million passengers and 300,000 metric tons of goods a year, he said.
After securing the $1.2 billion in total needed for the first phase of the project, probably by August or September, Sudan will invite bids from interested companies, who are likely to be from the lending nations. At least four countries will be represented on the project, Abdalla said.
The first phase is due for completion by the end of 2014, and air traffic will be transferred from the current 65-year-old airport to the new one early the following year, he said.
Several other regional funds have pledged to give loans to the project, including the Saudi Fund for Development, the Kuwait Fund for Arab Economic Development, the Export-Import Bank of China and the Export Credit Bank of Turkey, according to Abdalla.