UAE agrees to grant Bahrain $2.5 billion

The UAE on Monday signed an agreement with Bahrain under which it will donate $2.5 billion to its protest-hit neighbor as part of a Gulf aid program to it and Oman, the BNA state news agency said.

Under the memorandum of understanding signed in Manama by the government of Bahrain and the Abu Dhabi Fund for Development, the oil-rich state will release the aid package over a period of 10 years, “$250 million annually,” BNA said.

The grant will be directly managed by the Abu Dhabi fund, BNA said.

It is earmarked for development projects in the kingdom that continues to face daily protests by members of its Shiite majority, nearly two years after a deadly crackdown on demonstrations against the Sunni al-Khalifa ruling dynasty.

The six Gulf Cooperation Council states decided at a meeting in March 2011 to establish a $20-billion fund to finance development projects in Bahrain and Oman, which has also seen protests calling for reform.

In addition to Bahrain, Oman and the UAE, the GCC includes Kuwait, Qatar and Saudi Arabia.

The aid package was pledged days before Saudi-dominated Gulf troops rolled into the island kingdom to boost its security forces which went on to quell protests in mid-March 2011.

The total amount of the grant to Bahrain and Oman is to be divided equally between the four other GCC states.

Bahrain signed similar framework agreements with the Kuwait Fund For Arab Economic Development in September and the Saudi Fund for Development in December, BNA said.