Lending Operations Cycle

The project cycle in the Arab Fund begins with project familiarization and receipt of a financing request from the Governor representing the country requesting the loan, along with a techno-economic feasibility study for the proposed project.

Under the guidelines of the Arab Fund's lending operations, the project undergoes a desk-review and a field-visit evaluation by the Fund's technical staff. If the project proves feasible, a loan agreement is prepared, negotiations take place between the representatives of the Arab Fund and the representatives of the country concerned, and the agreement is initialized. The loan committee, comprising of representatives from the Arab Fund and an expert, chosen by the Governor of the member state, presents the Director General with a report on the technical and financial feasibility, the viability of project and the proposed financing and conditions.

The Director General then presents a report on the final agreement that includes the evaluation report, the loan committee report and the loan agreement to the Board of Directors.

After the Board of Directors accepts the project, the final signing of the loan agreement takes place by the delegated representative of the borrower and the Director General/Chairman of the Board of Directors. The borrower takes the necessary measures to ratify the loan agreement legally, and meet other required conditions to make the loan agreement effective. Once this is achieved the Arab Fund informs the borrower that the agreement is effective, and that the loan can be drawn down, in accordance with the Fund's guidelines.

The Arab Fund's technical staff then supervise the project implementation, through written reports and field visits.

The lending operations cycle can be graphically explained using the following chart:


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