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
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: