The Egyptian government and the Kuwait Fund for Arab Economic Development (KFAED) have signed a loan agreement worth $98.7m to finance the power grid project between Egypt and Saudi Arabia, reported Amwal Al-Ghad.

Egypt’s Minister of International Cooperation Sahar Nasr and KFAED’s Director General Abdulwahab Al-Bader signed the agreement.

The project aims to exchange power between Egypt and Saudi Arabia to improve the economy of operation and to support the stability of the two.

The project contains three stations to evaluate the alternating current (AC) and turn it into a DC voltage of 500 KV in the Egyptian city of Bader and the Saudi cities of Tabuk and Madinah.

According to KUNA the loan will be repaid in 40 semi-annual installments with an annual interest rate of 2%. The total cost of the project is estimated at EGP4.7b.

Egypt has so far received about 40 loans to finance projects in different sectors from KFAED, including two grants worth $16.8m donated by Kuwait to rebuild schools affected by the earthquake that hit the country in 1992 and some towns harmed by heavy rains in 1995.