Egypt and the Kuwait fund for Arab Economic Development (KFAED) signed on Tuesday the first agreement in a pledged series of projects for the development of Sinai, according to the international cooperation ministry's website.

The KFAED will loan Egypt $100 million to finance five water desalination plants in South Sinai.

The loan will be repaid after five-year grace period for a 25-year duration at a yearly interest rate of 2 percent.

The Kuwaiti fund had pledged in November 2015 $300 million annually over five years for developmental projects in Egypt.

In 2015, several Arab funds pledged $1.5 billion to finance developmental projects in Sinai, including the Kuwait Fund for Arab Economic Development, the Abu Dhabi Fund, the Arab Fund for Economic and Social Development and the Islamic Development Fund.

The KFAED said its contribution to Sinai development comes as part of its earlier commitment.

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