Jordan-Kuwait accord to regulate $1.25b grant 

(MENAFN - Khaleej Times) Jordan and Kuwait on Tuesday signed a framework agreement to regulate a 1.25 billion grant to be extended by the Gulf state over five years.

The funds, Kuwait's contribution to a 5 billion grant for Jordan that was endorsed by the Gulf Cooperation Council (GCC) last year, will be extended by the Kuwait Fund for Arab Economic Development (KFAED), representing the Kuwaiti government.

During a GCC summit in December 2011, Saudi Arabia, the United Arab Emirates, Kuwait and Qatar decided to extend 5 billion over a five-year period to support development schemes in Jordan. Each state will pay 1.25 billion.

The framework agreement was signed by Planning and International Cooperation Minister Jafar Hassan and KFAED Director General Abdul Wahab Al Bader.

Hassan told reporters that part of the grant will be allocated to finance development schemes included in the 2012 state budget.

Two months ago, a technical delegation from KFAED visited Jordan and agreed on an initial list of development projects the Kingdom plans to implement over the coming years, Hassan said, adding that the Kuwaiti contribution would support the Kingdom's economy, which this year has witnessed difficult financial challenges he attributed part of them to regional instability.

According to the planning ministry figures, the 1.25 billion Kuwait grant will include spending 104 million on the health sector, 67 million on education and higher education, and 84 million on water schemes.

A total of 458 million will be allocated to development projects in governorates, while the transport sector will see spending of 317 million and 218 million will go to the energy sector, the ministry indicated.

As such, a total of 687 million will be allocated for ongoing projects in the 2012 budget while the rest of funds, 563 million, for new projects - the majority of which expected to start next year.

Agreements for each development project to be funded by the Kuwaiti grant should be signed separately.

The GCC grant, the minister said would enable Jordan carry out several development and capital schemes that can stimulate economic growth, attract investments in key sectors and create job opportunities.

The development projects will be implemented in the sectors of energy, transport, health and water among others, he noted.

"Jordan is in dire need of development projects to stimulate its economy," said Al Bader, indicating that KFAED will soon decide on extending a loan to finance the expansion project of the Samra Power Generation Company.

Between 1962 and 2011, KFAED funded around 25 projects in Jordan worth 586 million, according to Al Bader.