Number of Member States : 22
Purpose
The Arab Fund for Economic and Social Development, is an Arab regional financial
institution funding economic and social development through:
- Funding Publicly owned projects through concessional loans.
- Funding private sector projects.
- Participating in Equity financing.
- Establishing and Managing Private Funds.
- Encouraging the utilization of private and public capital.
- Providing expertise to member states.
- Financing SMEs.
As at 31/12/2021
|
Shareholders' Capital
|
KD Million
|
|
Authorized
|
4,000
|
|
Issued
|
3,000
|
|
Paid -in
|
2,901
|
|
Shareholders' Equity
|
3,920
|
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 via loans and equity financing ,
grants and SME support.
X
PUBLIC SECTOR FINANCING
To attain its purpose, the Arab Fund provides financing for economic development
projects in the Arab countries by 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. It 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 provides expertise
and technical assistance in the various spheres of economic development.
PRIVATE SECTOR FINANCING
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. Assistance in support
of eligible projects and enterprises takes various forms, including loans on market
terms, loan syndication, guarantees, lines of credit, equity participation, leasing,
underwriting of securities, the establishment of venture capital funds, and the
provision of related institutional support and advisory services.
Lending Terms
|
|
Rate (%)
|
Grace Period (Years)
|
Term (Years)
|
|
Low Income Countries
|
2
|
4-7
|
30
|
|
Other Countries
|
2.5
|
4-7
|
30
|
Lending Terms and Conditions
Lending terms are determined based on the ongoing rates in the Kuwaiti financial
market, after taking into consideration the borrower's financial situation, and
risks involved in investing in the project. The maximum amount for a loan is KD
10 Million, or 35% of the total project cost, whichever is smaller.
Summary of Cumulative Operations (1974-Dec. 2021)
|
Loans
|
KD Million
|
|
No. of Loans
|
689
|
|
No. of Projects
|
594
|
|
No. of Benefiting Countries
|
17
|
|
Amount
|
11,077
|
|
Net Amount
|
9,560
|
|
Withdrawn
|
7,101
|
|
Re-paid
|
3,849
|
|
Outstanding
|
3,252
|
Summary of Cumulative Operations (1974-Dec. 2021)
|
Loans
|
KD Million
|
|
No. of Loans
|
17
|
|
No. of Projects
|
15
|
|
No. of Benefiting Countries
|
7
|
|
Amount of Loans
|
62.3
|
|
Net Amount of Loans
|
49.4
|
|
Withdrawn
|
45.6
|
|
Re-paid
|
21.5
|
|
Outstanding
|
24.1
|
|
Cases of Equity Participation (Companies)
|
9
|
|
Amount of Equity Participation (KD Million)
|
38.8
|
|
Contribution to Private Equity Fund (KD Million)
|
2.5
|
Sectoral Distribution of Loans (1974- Dec. 2021)
|
Sector
|
KD Million
|
|
Electricity & Energy
|
3,378
|
|
Transportation & Telecommunication
|
2,965
|
|
Agriculture, Irrigation & Rural Development
|
1,488
|
|
Water and Sanitation
|
1,483
|
|
Education, Health & Housing
|
1,001
|
|
Industry & Mining
|
518
|
|
Other Sectors
|
306
|
|
Total
|
11,139
|
As at 31/12/2021
X
Grants
Each year, about 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.
Grant amounts range from KD 25 thousand to KD 300 thousand, and must be approved
by the Board of Directors. A grant becomes effective after the signing, by the Fund
and the beneficiary organization, of a "Letter of Understanding" spelling out the
procedures for the execution of the grant and the disbursement schedule.
Within the framework of providing support to the Palestinian People in order to
reinforce their resistance and presence on their land, and improve their economic
and social conditions, the Arab Fund, each year since 2001, allocates 10% of its
profit to support the Urgent Program to Support the Palestinian People. The program
includes support to non-government institutions and civil societies which provide
education, health and social services to local communities, support to universities
and educational institutions, and rehabilitation of school buildings, as well as
raising the quality of health services through the rehabilitation and development
of health institutions, rural development and economic empowerment.
Cumulative Grant Commitments (1974- Dec. 2021)
|
|
No. of Grants
|
Amount KD Million
|
Percent
|
|
Grants Provided to Arab Countries
|
666
|
175
|
69%
|
|
Grants Provided for Joint Arab Projects
|
603
|
78
|
31%
|
|
Total
|
1269
|
253
|
|
|
Urgent Program to Support the Palestinian People
|
|
179
|
|
|
Program to Support the Resistance of Jerusalem
|
|
30
|
|
|
Total
|
|
209
|
|
|
Grand Total
|
|
462
|
|
Distribution of Grants Provided to Arab Countries
(by Type of Activity)
Distribution of Grants Provided for Joint Arab Projects
(by Type of Activity)
As at 31/12/2021
X
Establishment of the Special Account
The Arab Economic and Social Development Summit, held in the State of Kuwait on
19 – 20 January 2009, endorsed the initiative of his highness the late Amir of Kuwait
Sheikh Sabah Al Ahmad Al Jaber Al Sabah to create a financial facility to fund and
support SMEs in Arab countries. The Arab Fund for Social and Economic Development
was entrusted to establish and manage the Special Account. The Arab Fund’s Board
of Governors approved the establishment of this facility and its management by the
Arab Fund.
SME Private Program (2011 - Dec. 2021)
|
Participating Arab Countries
|
18
|
|
Capital Commitments
|
$ 1,310 Million
|
|
Paid Capital by Arab Countries
|
$ 1,169 Million
|
|
Paid Capital by Arab Fund
|
$ 100 Million
|
Lending Terms
|
Interest Rate (%)
|
Repyment (Years)
|
Grace Period (Years)
|
|
2-3
|
10
|
3
|
Its Objectives
The main objectives of the Special Account are as follows:
- Contribute to the financing of private sector projects on commercial
and developmental basis, in accordance with the decisions of its Management Committee.
- Encourage the flow of private capital, both from within as well
as from outside the Arab countries, to finance private sector projects in the Arab
countries aimed at effectively contributing to their economic development.
- Attract funding for private sector projects in accordance with
the principles, controls and standards set forth by the Management Committee.
- Help develop and strengthen the capacity of the private sector
by providing suitable technical and advisory assistance.
SME Financed (2011 - Dec. 2021)
|
No. of Benefiting Countries
|
12
|
|
No. of Benefiting Entities
|
27
|
|
No. of Approved Loans
|
46
|
|
No. of Cancelled Loans
|
8
|
|
Net Number of Loans
|
38
|
|
No. of Projects Financed
|
98,284
|
|
Total Value of Approved Loans
|
$ 1,471 Million
|
|
Total Value of Cancelled Loans
|
$ 271 Million
|
|
Net Amount
|
$ 1,200 Million
|
|
Cumulative Amount Withdrawn
|
$ 1,014 Million
|
|
Cumulative Amounts Repaid - Principal
|
$ 343 Million
|
|
Cumulative Amounts Repaid - Interest
|
$ 84 Million
|
|
No. of Jobs Created
|
479,638
|
|
|