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Grants
Introduction

Each year, the Arab Fund allocates about 5% of its net profit to grants, with the aim of providing institutional support to member states, enhancing the efficiency of preparation and implementation of projects, as well as conducting studies, research and other activities related to vital development issues. In the case of grants to be provided to countries, the grant request is submitted by the Governor of the Arab Fund representing the country requesting the grant, while in the case of joint Arab grants, the request is submitted by the person responsible for the national agency that will implement the grant. Following a thorough review of the justification for the grant by the technical staff in the Fund, the staff, depending on the amount of the requested grant, prepare a memo, either to the Fund's Director General or to the Fund's Board of Directors, recommending the approval of providing the grant. The grant becomes effective after signing, by both the Arab Fund and the beneficiary's representative, of a Letter of Understanding detailing the scope of services financed by the proceeds of the grant, its implementation schedule and withdrawal procedure.

Additionally, within the Arab Fund's efforts to support the Palestinian people and reduce their suffering, enhance their resistance to occupation, and improve their economic and social conditions, the Fund, as of 2001, allocates 10% of its net annual profit to participate in the financing of the Urgent Program to support the Palestinian people.

Objectives of Grant Operations

The Fund primarily aims, through its grants program, to assist member states in absorbing and implementing economic and social development programs and projects, deepening the elements of integration and interdependence between their economies, and enhancing their capabilities in the areas of economic and social development, including preparing studies and providing basic development-enhancing needs, along with helping them face emergency conditions and situations, training and developing human resources, increasing institutional capacities, and holding seminars and conferences.

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The life cycle for Grants, provided by the Arab Fund, start by becoming familiar with the project, to be financed by the grant, and the receipt, from the entity applying for the grant, of an official application. The application letter should be accompanied by justifications for the grant, the cost of the project to be financed from its proceeds, and the financing plan if the amount of the requested grant does not fully cover the cost of the project.

The technical staff in the Fund, then, proceed with the process of desk-evaluating the grant application in preparation for preparing a memo to the Director General of the Fund where they either recommend Providing a grant or declining the request.

If the Director General of the Arab Fund approves the principle of financing the subject project, by providing a grant, he decides whether to approve the grant, as part of the delegation offered to him by the Board of Directors of the Fund, or that there is a need to present the grant application to the Board. In both cases, the technical staff of the Fund prepares a detailed memo, once the grand request is approved, the Arab Fund prepares a Letter of Understanding (LOU) describing the aim of the grant, its amount, how its proceeds should be used, the manner in which the works/ services covered in the grant will be executed and the elements, of the project, that will be financed by the grant, in case there are other sources of finance for the subject project.

The Arab Fund then prepares two original LOUís and obtain the signature of the Director General of the Fund on both originals, and sends them to the grant beneficiary, who signs both originals, keeps one for his records and returns the other to the Arab Fund. The grant becomes effective upon the receipt of the Arab Fund of one, of the originals of the LOU, signed by both the Arab Fund and the grant beneficiary, and the documents evidencing that the grant beneficiary fulfilled all the requirements mentioned in the LOU for its effectiveness.

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Eligibility to Benefit from the Grants

The entities eligible to benefit from the grants provided by the Arab Fund include the following:

  • The central governments of the Fund's member states, their local administrations, and their public institutions.
  • Organizations and bodies established by international agreements between the governments of member states of the Fund, institutions formed for the implementation and/or the supervision of joint Arab projects, and approved by the member state or the concerned member states.
  • Regional and international organizations and bodies that assume sectoral or development responsibilities in the Arab countries, or those that provide grants to the Fund's member states.
  • International organizations and bodies that carry out activities of paramount importance in formulating development policies at the international level or contribute to the strengthening of international cooperation for development, provided that the activity, which is intended to be funded from grants, is carried out for the benefit of Arab countries.
  • An Arab NGO that meets the following rules and criteria:
    • It is a non-profit organization.
    • It has an economic or social development objective that falls within the sustainable development goals of the United Nations.
    • It aims to implement local projects and programs within one country, or jointly among several countries.
    • It is legally registered in one of the Arab countries, has a legal personality recognized by the concerned country, and seeks to achieve the public interest.
    • Its activity is not prohibited or inconsistent with the objectives and activities of the Arab Fund.
  • Additionally,
    • The aim of the organization should be providing general services and benefits in the sector in which it operates.
    • The organization must have an actual contribution (administrative, financial, technical) in the project for which it is applying for the grant, so that the implementation and financing is a joint effort between it and the Fund.
    • The organization must have an institutional framework that includes the administrative, financial and legal requirements necessary for its operation, through which it can be judged on its ability to implement the program financed by the grant, in accordance with the conditions and rules determined by the Fund, and it must have acceptable experience in implementing programs and activities that fall within its competence to ensure that it implements a project or aid activities in a highly efficient and appropriate manner.
    • Priority is given to projects and activities implemented in lower-income member states, which contribute to solving basic bottlenecks for which there are insufficient resources.
  • Any other parties that carry out activities that serve the Fund's purposes, as determined by its Board of Directors.

Areas of the Grants

  • The Arab Fund provides grants in various areas (fields) of economic and social development, and in the technical and administrative fields, with emphasis on economic, financial and technical feasibility studies and general studies, and attention to providing institutional support and establishing principles of governance and transparency, and supporting infrastructure sectors, including the areas of technology, digitalization, education, health, and maintaining environment, training and capacity development, conferences and seminars.
  • The Fund determines the areas in which grants are provided, based on the needs and available resources, which include, but are not limited to:
    • Feasibility Studies and General Studies: which include pre-investment studies, such as technical and economic feasibility studies for the preparation and processing of projects in the member states, studies of joint Arab and public projects, and in particular studies related to surveying and detection of natural resources and identifying the possibilities of benefiting from them and achieving joint exploitation, along with studies related to the development of infrastructure facilities, in accordance with the approved needs and priorities of member states.
    • Institutional Support: which aims at building and developing the technical and administrative capabilities of the concerned authorities, establishing and developing the financial, administrative and information systems for these entities, and benefiting from modern technologies.
    • Knowledge, Training and Education: which includes the dissemination of knowledge, the development of human resources, the development of the capabilities of Arab cadres and the contribution to the provision of advanced programs and technologies necessary for human development.
    • Research and Studies: which include supporting research activities and efforts and preparing economic and social studies of interest to Arab countries.
    • Seminars and Conferences: which includes activities concerned with researching and discussing issues of importance to Arab economies, or developing joint Arab projects.
    • Other Areas: which include any other areas that are consistent with the objectives of the Fund and contribute to achieving the Sustainable Development Goals.
  • Emergency Grants: The Arab Fund, based on what it decides in cases that require it, may provide emergency grants without being limited by the financial ceilings and the specific quotas for the provision of annual grants.
  • Unless the Board of Directors agrees to, in exceptional cases, the maximum amount of any grant is KD300 thousand (Three Hundred Thousand Kuwaiti Dinars), and no member state should receive more than two grants in any fiscal year.

Grant Application Fulfillment Conditions

  • When reviewing requests for grants, the Fund takes into consideration the fulfillment of the following conditions:
    • In the case of requests submitted by governmental agencies and institutions of member states: the request must be submitted, or reinforced, by the Governor of the Fund representing the concerned member state, and should reflect the developmental priorities of that member state.
    • In the case of applications submitted by local non-governmental associations and institutions: the application must be submitted by an entity officially licensed to practice its activity by the competent authority in the concerned member state. In such cases, the Fund informs the Fund's Governor, representing the concerned country, about grant(s) it decided to provide to qualified associations and institutions in his/her country.
    • In the case of applications submitted by Arab and international organizations and bodies, and Arab non-governmental organizations: the application must be submitted by the person who has the right to represent the concerned organization or body.
    • That the proposed grant objectives, and the activities included in it, are consistent with the objectives of the Fund.
    • That the subject of the grant falls under the main activities of the entity that submitted the request, and that the request includes the financial and/or in-kind contribution of that entity to the implementation of the activities included in the proposed grant.
    • That the request for the grant includes its objectives, justifications, benefits expected to be achieved from it, its components, costs, financing plan, and a program or timetable for implementing the project or activity proposed for financing, showing the distribution of its estimated costs among the elements of the project or program, the expected timetable for its implementation, the beneficiary body, the entity implementing it, with a detailed statement of the status of each of them, the financial statements of the beneficiary for, at least, the last three years, with the reports of the external auditor, and any other necessary data requested by the Fund.
    • That the amount of the grant is commensurate with the capacity of the agency implementing the grant and the purpose for which the grant will be provided.
    • That the entity that will undertake the implementation of the grant has the necessary expertise and appropriate financial solvency.
    • That the duration of implementation of the proposed project or program should be commensurate with the nature of the entity and the requirements for implementation, provided that the implementation period does not exceed a maximum of three years. An additional period, not exceeding two years, could be provided, subject to justifications acceptable to the Fund.
  • Completed grant requests are evaluated in accordance with the guiding principles, foundations, standards and controls contained in the previous paragraphs, provided that partial and incomplete funding for projects is avoided, and it is ascertained that providing funding will lead to the completion of a completed project, projects or activities in a manner that achieves the intended purpose of financing them.
  • It is not permissible to consider providing any grants to member states that are late in fulfilling their financial obligations to the Fund in accordance with the procedures in force by the Fund, with the exception of aid provided for emergency or humanitarian purposes.

Grant Application Procedure

When applying for a grant, the Arab Fund requires the following documents:

  • A valid license for the activity of the beneficiary.
  • Incorporation documents.
  • Organization structure.
  • The administrative body and governance used in decision-making.
  • Final audited accounts for the last three years, and the audit reports.
  • The current work program and future plans.
  • Local and external partners.
  • Previous experiences in similar projects.
  • Previous projects that the Fund contributed to their financing.
  • Description of the proposed project: objectives, components, detailed budget, financing plan, target beneficiaries and expected project outcomes.
  • Work program and activities of the beneficiary and its sources of financing, for each of the last three years.

The Arab Fund will not review the grant application request until all the above documents have been received.

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Conditions that Must be Met Before Starting to Withdraw from the Grant:

  • Effectiveness of the grant's Letter of Understanding
    Convincing evidence must be submitted to the Fund showing that all the conditions of effectiveness stipulated in the Letter of Understanding have been fulfilled. The grant is considered effective from the date on which the Arab Fund sends a letter to the beneficiary indicating its acceptance of the evidence presented to prove the fulfillment of the conditions of effectiveness.
  • Authorization to Withdraw
    The beneficiary must send to the Arab Fund the official document evidencing the authorization of the person or persons authorized to sign withdrawal requests with their signature forms approved by the beneficiary, in accordance with the grant's Letter of Understanding, using the form prepared for this (see Appendix No. (2)). In the event of multiple delegates, the beneficiaryís representative shall indicate whether they are authorized to sign individually or jointly.
  • Contracts
    The Fund must be provided with a signed copy of each contract, purchase order or work order whose value is covered in whole or in part by the proceeds of the grant.

List of Goods Funded by the Grant

Withdrawals from a grant are solely intended to cover the value of the goods and services set forth in the executive plan and the estimated budget attached to the grant's Letter of Understanding. No amendments may be made to these annexes unless the beneficiary sends an amendment request to the Fund, and the Fund sends its written approval to such request.

Cases of Withdrawals from the Grant

Withdrawals from the grant can be achieved using one of the following cases:

First case: to repay amounts already paid by the Beneficiary.
Second case: to address required payments.
In exceptional cases, different withdrawal patterns may be made from the grant in accordance with agreed-upon arrangements between the beneficiary and the Fund.

Draw Formula

In both withdrawal cases referred to above, the beneficiary must submit a request to the Fund to withdraw an amount from the grant using the forms designated for each case. Appropriate supporting documents should be attached to these requests.

Numbering of the Withdrawal Requests

Every withdrawal request submitted to the Fund should be given a serial number regardless of the case under which this request falls. It is permissible to add sub-numbers showing the type of withdrawal status and the serial number of the request in each case.

Withdrawal Requests Sent by e-mail

The beneficiary can submit a withdrawal request via e-mail, to which he attaches the supporting documents, provided that he sends, by express mail, the original withdrawal request and the summary statement.

For more details about aid withdrawal procedures, please download the file "Aid Withdrawal Procedures and Documents" located under the Fund's publications section.

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