Applications for Public Sector loans have to be submitted by the Governor representing the country requesting the loan.
The request has to be accompanied by a techno-economic feasibility study of the project to be considered for financing.† The techno-economic feasibility study should contain the following minimum information:
On the Technical side
- description of the nature of the project
- demand for the project
- estimated project cost
- estimated schedule for implementing the project
- conceptual design of the project
- environmental effects of the project
On the Economic Side
- justification of the project
- explanations for why the project represents the most suitable solution to†meet demand
- economic rate of return (EIRR) of the project
- financial rate of return (FIRR) of the project
- sensitivity analysis for both the EIRR and FIRR of the project
Applications for Private Sector loans from eligible establishments
An eligible establishment has to meet several minimum requirements:
- it has to be a legally independent entity,
- it has to have a†sound financial position,
- it has to have good management practices,
- it must operate on a purely commercial basis,
- its main†objective is†to develop the economy(s) of one or more member countries,
- it meets the financing requirements for private sector financing.
Requirements for Private Sector Financing
Not less than 51% of the establishment capital should be owned by citizens of member states.
The Fund also participates in financing projects jointly owned by the public and the private sector in a member state, as long as the establishment, which enjoys complete legal, financial and operating autonomy, is run on a strict commercial basis, and meets several additional requirements for the distribution of its capital. For further details, please refer to the "General Policies and Guidelines for Private Sector Operations" issued by the Arab Fund.
Financing Application Procedure
Eligible establishments can apply for Private Sector Financing directly to the Arab Fund. The application should be accompanied by a techno-economic study of the project, financial statements and a business plan of the establishment, along with the names and citizenships of the major shareholders.†
Grant Application Procedure
Approximately 5% of the Arab Fund's annual net-income is allocated to grants. These grants aim to provide institutional support to Member countries, by enhancing efficiency in project preparation and implementation, including the conducting of technical and economic feasibility studies, and also through studies and research and other activities related to vital development issues. Grants must be approved by the Board of Directors, and become effective after being signed by the Fund and the beneficiary organization, in the form of a "Letter of Understanding" stating the implementation procedures of the activity financed, and the disbursement schedule.
Requests for grants from the Arab Fund can be submitted by a member state or any eligible Arab, regional or international organization. In order to be considered, requests for national grants should be accompanied by a letter from the Fund Governor of the country from which the request for the grant has emanated.