KUWAIT FUND REPORTS LIMITED PROGRESS ON ASSISTANCE

UNCLAS KUWAIT 001933 SIPDIS SENSITIVE SIPDIS STATE FOR NEA/ARP E.O. 12958: N/A TAGS: ECON EAID PGOV PREL IZ KU SUBJECT: KUWAIT FUND REPORTS LIMITED PROGRESS ON ASSISTANCE DISBURSALS TO IRAQ REF: A. KUWAIT 883 ¶B. KUWAIT 399 Sensitive but unclassified. Not for internet distribution. ¶1. (SBU) Summary: During a May 22 meeting with Econoff, the Kuwait Fund for Arab Economic Development's (KFAED) Regional Manager for Arab Countries cited no progress, other than a preliminary report on school construction, pertaining to the GOK's $560M reconstruction package for Iraq (ref B). The KFAED official also voiced concern about the replacement of former Iraqi Planning Minister Barham Salih (trusted KFAED interlocutor) and the likelihood of further delays in aid disbursal if new Planning Minister Ali Baban decides to revisit the terms of KFAED's December agreement with the Iraqi Transitional Government (ref B para 4). The official also said that planning for a proposed KFAED-hosted donor meeting for Iraq's power sector needs (ref A) are on hold pending renewed dialogue with the new Iraqi government. End Summary ¶2. (SBU) On May 22, Econoff met with Marwan Al-Ghanem, Regional Manager for Arab Countries at KFAED to follow-up on the GOK's $560M reconstruction assistance package for Iraq (see ref B for package details). Al-Ghanem explained that there was no significant progress on aid disbursals to Iraq since his last meeting with Econoff on March 8. He explained that Iraqi officials' efforts to form a new government had put on hold all dialogue with KFAED on reconstruction assistance. According to Al-Ghanem, KFAED officials are concerned that the replacement of former Iraqi Planning Minister Barham Salih (now Deputy Prime Minister),a trusted KFAED interlocutor, could result in further aid disbursal delays if Salih's replacement, Ali Baban, decides to revisit the terms of the December agreement on allocation of the GOK's $560M assistance package (ref B). ¶3. (SBU) Despite the lack of bilateral dialogue over the past several weeks, Al-Ghanem pointed to some progress on the initial $30M grant (out of $60M) for school construction (see ref B for allocation details),explaining that the joint Kuwaiti-Iraqi consulting firm hired to conduct a feasibility study had completed its preliminary report. The report would be reviewed by the KFAED and Iraqi Ministry of Education officials before a final design and tendering phase is authorized. Al-Ghanem estimates construction to begin no earlier than this winter. ¶4. (SBU) Al-Ghanem also stated that initial KFAED plans to host an Arab donors meeting to fund Iraq's northern power station (see ref A) were now on hold pending renewed contact with the new Iraqi government. He was unable to predict when planning would resume. (Note: The Ambassador is scheduled to meet KFAED Director General Al-Bader on May 29 to urge greater GOK outreach with the new permanent Iraqi government. End note). ******************************************** For more Embassy Kuwait reporting, see: http://www.state.sgov.gov/p/nea/kuwait/?cable s Or Visit Embassy Kuwait's Classified Website: http://www.state.sgov.gov/p/nea/kuwait/ ******************************************** LEBARON