ADF Approves US$ 15 Million Supplementary Loan to Fund Nouakchott Water Supply Project

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Tunis, 29 May 2008 – The Board of Directors of the African Development Fund (ADF), the concessional window of the African Development Bank Group, approved on Wednesday in Tunis, a supplementary loan of 9.46 million Units of Account* (US$ 15 million) to finance the provision of safe drinking water from the Senegal River (Aftout Essaheli) to Nouakchott, capital of Mauritania.

The supplementary loan brings the total ADF funding in the project to UA 26 million (US$ 42 million), including UA 6.54 million required to complete the project. These comprise UA 3.09 million (US$ 5 million) loan and UA 3.45 million (US$ 5.6 million) grant to be approved in 2009.

The project aims at ensuring the availability of drinking water in the city of Nouakchott over the next 30 years by improving access to drinking water, thereby enhancing the living conditions of the people in the area. Under the project, drinking water supply will be increased from the current 50,000 cubic metres per day to 170,000 m3 in 2020 and to 226,000 m3 in 2030, with water pumped from River Senegal.

The number of inhabitants who will benefit from the project is estimated at 1 million in 2008, 1.3 million in 2020 and more than 1.8 million in 2030.

The supply of drinking water to Nouakchott from River Senegal will also make it possible to cater to the needs of 40,000 inhabitants in the rural areas traversed by the new transmission line to check over-exploitation of the Idini water table, the only source of drinking water in Nouakchott.

At the opening of bids for the project’s implementation in 2006 (including the installation of water supply pipes financed by the ADF), it was established that costs had increased considerably owing primarily to increases in the price of raw materials (notably iron-ore and scrap metal). In addition to the price increases, the significant variation in the exchange rate (Euro/US dollar) over the 2003-2006 period resulted in a financing gap since the assessment of the project in 2003 was based on the dollar exchange rate at the time whereas bids received in 2006 were denominated in Euros. The estimate for the additional components to be covered by the ADF supplementary loan stands at UA 16 million. The overall revised cost estimate therefore stands at UA 330.35 million as against UA 155.78 million in 2003.

The Bank Group started operations in Mauritania in 1972. To date, the cumulative commitments of the Group in the country amount to US$ 560 million (137 billion Ouguiya) in 59 operations.

* UA 1 = US$ 1.61055 = MRO 400.332 as at 28/05/2008


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