Sudan has secured a US$350 million concessional loan to build its new airport, and to raise two dams, from the Arab Fund for Economic and Social Development, officials said on Monday. Sudan, under US sanctions since 1997 and with most of its nearly $40 billion external debt in arrears, is in economic crisis. It has limited access to concessional loans to develop the country, Africa's biggest by land masse, which has been scarred by decades of multiple civil wars. The south, home to around 75 percent of the country's 500,000 bpd of crude production, is also set to secede in July, creating economic and political uncertainty that is deterring investors. Sudan is campaigning for debt relief to be able to access concessional funds from the International Monetary Fund and the World Bank. The loans from the Kuwait-based Arab Fund for Economic and Social Development would be for 25 years with a 2.5 per cent interest rate, the Fund said in a statement. The around $175 million loan for the new airport would enjoy a grace period of six years and the $175 million loan for raising two dams has a grace period of seven years. The IMF has urged Sudan to limit its non-concessional borrowing as foreign currency reserves run low and inflation is soaring. Officials have said Sudan's new airport will cost some $2 billion and should be completed by 2014. Khartoum airport straddles the centre of the city, and crashes are common. State Minister for Dams and Electricity As-Saddiq Mohamed Ali al-Sheikh said raising the Atbara and Sitteet dams on the river Nile north of Khartoum would provide an extra 200 mega watts of electricity when completed in four years' time. "These dams will be able to cover the peak hours in the national grid," he told Reuters. "It will also provide another 1 million feddans (420,000 hectares) of irrigated agricultural land," he said. The massive Merowe dam, also north of Khartoum, currently produces electricity to cover 80 percent of the national grid's needs of 1250 mega watts, he added. Sudan is growing wheat on a trial basis in its north to cover domestic consumption and to eventually export to neighbouring Egypt. A $10 million grant was also given for water projects in the arid east of the country, which contains Sudan's only port. The Arab Fund for Economic and Social Development is a pan-Arab government fund which mostly funds development in Arab countries.
