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The Republic of Yemen

Social Development Fund – Phase II

 

Loan No.: 425 Interest Rate: 3.0 %
Beneficiary: Social Fund for Development Grace Period: 7 years
Project Cost: KD 53.8 million Maturity: 25 years
Amount of Loan: KD 15.0 million Repayment: 37 semi-annual installments
Date of Loan Agreement: 16/04/2002 First Installment: 7 years from the first disbursement
Date of Effectiveness: 07/09/2002    

 

Objectives:

The project aims to lessen the severity of poverty and provide job opportunities and support community development, through financing sub-projects to develop the infrastructure and basic services which will benefit the local communities and participate in improving their standard of living. The project is  to provide loans to small and micro productive and service projects with economic or social developmental impacts, and to provide technical and institutional support to the institutions that are involved in managing the implementation of community development projects, as well as small and micro establishment projects and  labor intensive activities.

Description:

The project, which is expected to be completed within 5 years, consists of the following major components:

Part (A): Community Development: This part consists of implementing small sub-projects in accordance with specific priorities, with an emphasis on poor rural communities, the isolated areas and those in most need of infrastructure and services and which require special  needs, in addition to special projects of national heritage. These projects include building and rehabilitation of schools, health centers and water harvesting schemes. They also include the improvement of water quality and sediments traps and slow sand filters, and the construction and rehabilitation of secondary roads, support of rehabilitation centers and the renewal of traditional artisan skills including the preservation of historic and cultural heritage.

Part (B): Small and Micro Projects: This part includes providing secondary loans to investors to start and expand small establishments through financial intermediates which focus on financing projects that are run by women. It also includes increasing opportunities for establishing small income generating projects for the poor to help them find suitable job opportunities.

Part (C): Institutional Building: This part includes developing expertise at the non-government organizations and community associations in order to lessen their dependence on the Social Fund to implement secondary projects. This part also aims to develop expertise among the Social Fund employees through the development of supervision, project appraisal, and information systems. It also aims to develop accounting systems and assess the Social Fund projects’ impact on the beneficiaries.

The implementation of the secondary projects and other project components are distributed among all governorates, and the works includes all civil works, equipment, technical and financial consulting services, training, and technical and institutional support.

Financing:

The Arab Fund loan covers around 27.9% of the total project cost. The International Development Agency is contributing around KD 23 million (around 42.8%), the Government of the United States of America is contributing a grant of around KD 2.5 million (around 4.6%), the Islamic Bank for Development is contributing around  KD 1.8 million (around 3.4%). It is expected that the Dutch Government will contribute around KD 6.8 million (around 12.6%) and the beneficiaries will contribute around KD 3.1 million (around 5.8%) and the Government of Yemen will contribute around KD 1.5 million (around 2.9%) and will cover the remainder of the cost and any additional unexpected costs.

 

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