Republic of Yemen

Social Fund for Development Phase IV

Loan No.:

560

Interest Rate:

2.5%

Beneficiary:

Social Fund for Development

Grace Period:

6 years

Project Cost:

KD 326.9 million

Maturity:

25 years

Amount of Loan:

KD 30.0 million

Repayment:

39 semi-annual installments

Date of Loan Agreement:

06/03/2011

First Installment:

6 years following the first disbursement

Date of Effectiveness:

--


Objectives:

The project aims at alleviating the severity of poverty and unemployment, improving the standard of living of the local communities, and reducing the negative impact of the Economic and Financial Reform Program. These objectives will be achieved through financing of infrastructure and services sub-projects, provision of loans to small and micro enterprises, and provision of training programs and institutional support to the institutions involved in the various activities of the Social Fund for Development. The project is considered the fourth phase of the Social Fund for Development.

Description:

The project, which is expected to be completed by the end of 2016, consists of the following major components:

  1. Community Development: This includes the implementation of about 5050 sub-projects that will contribute to the enhancement of services and infrastructure in the remote rural and poor urban areas. The sub-projects include the construction and rehabilitation of schools, health care centers, roads, water networks, water harvesting systems, and wastewater treatment facilities, in addition to the improvement of water quality, support of poor rural farmers, the construction of rehabilitation centers for people with special needs, and the preservation of historic and cultural heritage.
  2. Small and Micro Projects: This includes the implementation of about 151 sub-projects to finance private small and micro projects. This will be accomplished through the provision of sub-loans to small businessmen and craftsmen, with emphasis on women and small investors. The sub-projects aim at creating new job opportunities and raising the income of poor families. They will be executed in cooperation with intermediary funding agencies and other funding organizations, in addition to civil societies and NGOs responsible for funding small investors.
  3. Program of Labor-Intensive Works This includes the implementation of about 939 sub-projects to enable the poor families to improve their standard of living, increase productive assets to the local communities and families. This will be accomplished through the creation of temporary job opportunities for poor families to implement labor-intensive projects in the areas of irrigation, water harvesting, rehabilitation of terraces and improvement of agricultural lands.
  4. raining and Institutional Support: This includes the implementation of about 635 sub-projects in the areas of training and capacity building, as well as the provision of financial support to organizations contributing to this component, and to those involved in production activities related to community development. This also includes developing databases, supplying hardware and software, and conducting training programs covering the management, execution, follow-up and maintenance of projects.

    The sub-projects will involve various sectors, and will prevail over all Yemeni governorates. They will also include all necessary project design, feasibility studies, civil and engineering works, supply of hardware and materials, in addition to technical and supervisory services.
  5. Project Management: This includes all administrative, financial and operating expenses needed for the management of the Social Fund for Development.

Financing:

The Arab Fund's loan covers about 9% of the total project cost. The International Development Agency is expected to contribute to the financing of the project with an amount equivalent to about KD 17.5 million (about 5%), and the British Government with an amount equivalent to about KD 43.6 million (about 13%). Other financial institutions are also expected to contribute to the financing of the project. The Yemeni Government will contribute with an amount equivalent to about KD 29.0 million (about 9%), and will cover any additional cost that may arise.


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