The Kuwait Fund for Arab Economic Development (KFAD) provides additional concessional loan of Kuwait Dinar 5 million (US$ 16.5 million) for the Kalu Ganga Development Project.
The Kaluganga project is being implemented by the Mahaweli Development and Environment Ministry with the financial assistance of the Saudi Fund for Development (SFD), Kuwait Fund for Arab Economic Development (KFAD) and OPEC Fund for International Development (OFID).
The proposed Kaluganga Reservoir will have a capacity of 265 million cubic metres (MCM) of water and will divert 100 MCM annually to the Moragahakanda reservoir.
The financial assistance received are not adequate to complete the project as the cost of the project has increased during the project implementation due to various reasons, including unforeseen geological conditions in the foundations and design revisions.
The KAFAD will provide a supplementary loan of KD 5 million to partly finance the funding shortfall. This loan is provided at an interest rate of 1.5 percent per annum with a repayment period 22 years.
The Kuwait Fund for Arab Economic Development provided KD 10 million for the project in 2009. The OFID will also provide an additional loan of US$ 18 million. The signing of the agreement pertaining to the loan of Kuwait Dinar 5 million took place at the office of KFAD in Kuwait recently.
Kuwait Fund for Arab Economic Development Deputy Director General Hamad AL-Omar and Finance Ministry Secretary Dr. R.H.S. Samaratunga signed the agreement.