Chinese bank plans to finance Shaqaya economic city project
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Kuwait studying KD 5 billion offer
KUWAIT CITY, Sept 20: According to informed sources, officials of the China Development Bank, which is in charge of preparing the technical study for the project to establish the economic city of Shaqaya, have hinted at the possibility of lending Kuwait KD 5 billion. This amount could be directed to financing the construction of the infrastructure required for the project. However, the bank officials also hinted at their concern over the lack of required government stability for moving forward with the giant project according to plan, reports Al-Rai daily. The sources explained that the bank officials prepared a technical study for the establishment of the project on an area of 50 million square meters.
They concluded that the cost for establishing the infrastructure for the project, which is expected to be completed in two years, is approximately KD 5 billion. The cost of all components of the project, which is estimated to be implemented as per the study over a period of ten years, is KD 19 billion. The study estimated annual returns of the project to be half a billion dinars. The sources said, “The competent authorities in Kuwait are studying the Chinese offer, in addition to other ideas, including that possibility of the Chinese bank to bear the entire cost of implementing Shaqaya City, in exchange for the privilege of utilizing the project, using the B.O.T. system and based on the technical study that it prepared regarding components and targets. The project will necessitate allocating 30 percent of the products offered in tenders for the project to Kuwaiti industries”.
The officials of the China Development Bank made an offer to the Kuwaiti side to finance the Kuwaiti government or its representative in the project with an amount of KD 5 billion, payable over a period of 19 years with an interest of up to 5.5 percent, or that the Kuwaiti government could establish a company that the bank would finance with the same benefits. However, they requested the approval of some legislation or legal amendments that would ensure the stability of the project away from political stumbling. In addition, they requested exclusive rights in some industries to resettle in Kuwait, as well as the adoption of an integrated building code for the project in cooperation with the Kuwait Municipality.
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