Australian firm Bothar Boring and Tunnelling has been granted a KD235,748 (US$866,000) three-year performance bond from export credit agency EFIC.

The bond will support Bothar’s KD2.35mn (US$8.2mn) subcontract for a Kuwait sewage project.

Kuwait’s ministry of public works is funding the project to upgrade sewage systems in the Al Firdous and Ardiya areas, just west of Kuwait City.

The EFIC performance bond is designed to give the Kuwait government assurance that if Bothar failed to perform its obligations, in this instance installing 15,445 metres worth of sewage systems, the government can call on the bond to reduce losses.

“Without EFIC’s support, the full cash collateral we needed to provide to secure the bond would have meant directing working capital from other opportunities,” says Mark Dart, managing director of Bothar.

“The performance bond provided by EFIC has enabled us to participate in this major contract and keep growing our business.”

Last October, EFIC provided Australian construction firm Wagners with two performance bonds for a Papa New Guinea LNG project.