The Arab Fund is similar in functions to the major regional multilateral development-finance institutions. Its principal purpose is to contribute to the financing of economic and social development projects in Arab States. To attain its purpose, the Arab Fund provides financing for economic development projects by extending loans and providing grants to support the implementation of development projects in the member states
The Fund serves as a catalyst for encouraging the investment directly or indirectly of public and private capital in a manner conducive to the development of the Arab economy, and acts as the manager of the Special Account that was set up for financing small and medium size private sector projects in the Arab countries. The Fund also provides expertise and technical assistance in the various spheres of economic development.
Loans to Public Sector Projects
The main activity of the Fund involves providing loans, on concessionary terms, to governments and public corporations and enterprises of member states, giving preference to projects which are vital to the Arab World and joint Arab projects.
Financing for Private Sector Projects
The Arab Fund’s private sector financing operations aim at enhancing the developmental and catalytic role of the Fund. To this end, the Fund seeks to contribute to the development of the private sector in member states and to foster the participation of the private sector in their economic development endeavors.
The Arab Fund manages the Special Account that was set up in the Fund to finance small and medium size projects in the Arab countries. Financing is provided, either directly or through intermediary organizations, to small and medium size private and public-private facilities and projects that satisfy the needs in the production and service sectors.
Each year, approximately 5% of the profit from operations is directed towards grants. These grants aim at providing institutional support to member states, enhancing efficiency in project implementation and conducting technical and economic studies related to vital development issues.
In addition to providing loans and grants to finance development projects, the Fund also provides a limited number of scholarships to Arab Ph.D. holders in different fields of specialization.