“THE Fund creates ties with other countries because of the work we do in providing the means for developing countries to improve, and help their citizens. Countries know Kuwait’s generosity from the contributions provided for all the projects requested to the Fund.”
Kuwait has been a hub for humanitarian activity since its inception; the Kuwait Fund for Arab Economic Development (KFAED) itself was established almost at the same time as Kuwait gained independence. Recently, the United Nations Secretary General, Ban Ki-Moon, named His Highness the Amir, Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah, a humanitarian leader for the philanthropic works of His Highness the Amir, and the organizations in Kuwait, which work under the Amir’s directives. Kuwait’s most recent contribution,which prompted the UN to honour His Highness the Amir, to Senegal was facilitated through the KFAED, and entailed building a myriad of public service buildings including schools and hospitals. Marwan Al-Ghanem, the regional manager for Arab countries has firsthand experience in the effects of projects executed by the Fund.
Answer: The Kuwait Fund for Arab Economic Development is the government arm for humanitarian aid being given to other countries; it is the organization that monitors and oversees the various humanitarian projects that the government wants to implement.
Initially, it was established in 1961 to assist Arab countries in their development programs, at the beginning. Throughout time, around the early 70’s, the Fund expanded operations to cover Africa, and then soon after that, Asia. After the liberation we covered central Asia, Eastern Europe, and Latin America.
The Kuwait Fund is a national institute owned by the government of Kuwait, it’s capital now is about KD 2 billion.
The difference between the Kuwait Fund and The Arab Fund for Economic and Social Development is that the Arab Fund is a regional organization where the shareholdersare some of the Arab countries.The major shareholders are Kuwait and Saudi Arabia, and their operations are mainly in the Arab countries, whereas the Kuwait Fund helps all over the world.
The Fund currently has operations in more than 103 countries. We have a loan agreement due for signature in the coming weeks with Nicaragua so it’s our first loan with them so we’ll have operations in 104 countries. We have projects all over the world in the developing countries.
In these countries we oversee, often multiple projects covering different fields.
We started out back in the 60’s with a few loans in four or five countries, and now our operations have expanded to help so many more.
Of course, we also give grants for urgent projects like schools or hospitals, for places dealing with a crisis. Anything from drought to natural disasters to post-conflict areas. As of 2013, the total value of grants reached around US $3,280 million.
We provided concessional loans all over the world, but more importantly we have provided loans to countries around the world that very few organizations have entered and agreed to help, like Cuba and North Korea. This is because the Fund is not a politically motivated organization, but an economically motivated one.
The Fund also orients its goals to aid in achieving the millennium development goals. We started to pay attention in the last few years to these kinds of projects.
The main objective of the Fund is to assist developing countries in their endeavor to achieve their development goals and improve the standard of living of their citizens.
A: I mean, there are 104 of them so I couldn’t list them all. Also, not all the countries are receiving loans. They can be receiving technical assistance or grants even.
There are 16 Arab countries, 40 African countries, 19 Southeast Asian and Pacific countries, 17 Central Asian and European countries, and 11 Latin American and Caribbean countries.
We have helped set up projects in Egypt, Syria, Djibouti, Jordan, and Morocco to name a few in the Arab region alone. If we’re looking at African countries, there’s so many; we have a lot of projects in Mozambique, Niger, Uganda, all over the continent, and it isn’t limited to just the countries I’ve mentioned.
We have given within the Central Asian and European countries to Turkey, Cyprus, Albania, Malta, and to places like Honduras and Jamaica in the Latin American and Caribbean countries.
A: What we do is finance projects in different sectors; we accommodate the request of the particular country in their programme. Their requests differ from anything ranging from infrastructure, roads, dams, construction, water supply; you name it, all public sectors.
The countries have to go about getting set up through a process set out by The Fund, and then they will get approval for the project. The country will first send a request for a certain project with the feasibility study if they have one ready. If they don’t have, we might grant them a technical assistance to finance conducting a feasibility study. Upon reviewing that study, we will submit to our loan committee — we have a subcommittee out of our board of directors. The subcommittee will consider such a request and give the board a recommendation to approve the loan in principle. At that time we will assign a technical staff to go to that country and appraise that project, prepare a technical report and initialize a loan agreement with that country, and then we will go back again to the board with our recommendation to approve that loan and then we’ll sign it.
This is mainly our operation. Sometimes we may assist the country. If they have a lack of expertise, we would provide them with such advice.
A: Firstly, the project needs to be important to the country, to the development plan of the country.
A specialist consultant conducts the feasibility studies. Now, we either have readymade feasibility studies, which have been prepared by that governments- the government of the country asking for help- their sources, or we fund them to be able to conduct the feasibility study. When we finance the feasibility study, we will shortlist certain consultants in that field; if it’s a project to do with the water sector, I will assign someone who knows the water sector, and so on.
Feasibility studies are mainly composed of two main parts, the technical part and the economic part. The technical part is easy; it’s the technical part, there’s very little confusion. The economic part is to see whether this project is feasible or not, and of course we don’t finance something not feasible. Sometimes a country, for its own reasons, will insist on conducting that project, regardless of its feasibility. In this case, we don’t finance it; they have to find finances from elsewhere.
The feasibility study will be conducted by a well-reputable company; as long as their name is on it, then we will grant it, but we do study it too.We go through the study, we might have some remarks on it, we might have some say on it, we might have some extra thing should be done on that.
A: Well, there are a lot of projects. The sectors we help mostly in are, transport- we help with many road building projects- and then energy projects. We also help with a lot of projects in the water and sanitation sector mainly, but we also have communication sector projects, agriculture, and industry sector.
Last year in Chad, we started up a project with Chad to help them in building a road. The project is going to contribute to the Trans-Saharan road that links Chad to other African countries.
In Mauritania, we approved a loan that will create irrigation canals and build a sugar factory for farming families so that production rates can increase for them.
We also have projects in West Africa, like in Sierra Leone, we are also helping to reconstruct a road that is around 120 kilometers, and it’s going to help a lot of people there because it opens a pathway for more economic development. Another recent project is the Assuit Steam Power Station in Egypt.
In the last fiscal year, we gave 22 loans in the value of US $833 million. The Arab countries received 8 of those loans. 10 to the African countries, three to the East, South Asian and pacific countries, one to Latin America.
There are projects in Sri Lanka to build 25 bridges. In the education sector, we have a project in China to expand a medical college there, and in Zambia, we’re funding a project for the establishment of a teachers training college. In Yemen there is a project aimed at constructing and equipping a community college, and in Cameroon there is construction of a secondary school, which will also be fully equipped.
We have water supply projects in Argentina and Lebanon, and an international airport in Burkina Faso. Also, there is ongoing construction of integrated laboratories in the mining sector.
In the health sector, we have projects for hospitals in Rwanda and Cape Verde.
There are a lot of projects. The ones I’m talking about don’t even scratch the surface. These are more recent but we have ongoing projects from years ago, and many more in the pipeline.
Since the Fund’s establishment, we have given 860 loans, with the value of about US$17.6 billion.
A: When we have a project — some of the projects are huge that we cannot finance it. My annual program is about 250,000,000 KD per year and 50 percent should go to Arab countries so on average annually I would have about 20-25 projects, with this limited resources, it would be so huge I cannot finance it myself so we might have a co-financer with our sister organization or an international organization.
We have Arab organizations, the Arab Fund, Saudi Fund, Abu Dhabi fund, OPEC fund and Badia, the Arab African Fund in Sudan, and the Islamic fund, and lately we have the Qatar Fund also. With those sister organizations we might together join financing a certain project.
On parallel cases we do have the international organizations such as the World Bank, the European Bank, the US Aid, UK aid. We might interfere in a certain project that needs something; the organization can then cover some of the costs of the total project.
Each project has to haveconsultant supervision. In accordance with the loan agreement, the Fund should receive a progress report either annually or semi annually on the project. So mainly we are monitoring those reports. Sometimes the case might exists that I have to send a follow up mission.
Q: What are some of the past major projects the Fund has contributed to?
A: Taking responsibility for the Arab country projects, one that I am proud of is the Marawi dam in Sudan.
Also, most of the power stations in Egypt, most of the dams in Morocco- we have so many big projects, in Oman we have some ports. Each project is unique in themselves, and I’m sure there are some other projects- for example, I used to take care of the Asian region. Most of the ports in China. We were the first, well, I think we were neck and neck with the World Bank, but I think we were at least one of the first who signed a loan agreement with China in the early 80’s.
It’s more than just one project in every country, it’s usually several. China is actually number four out of our recipient countries. Egypt is our greatest recipient in terms of the loan values, reaching billions of dollars in operations over there. In the late years, most of our projects over there are in electricity, but now they have submitted a new project in the railway sector.
A: We have a programme sometimes in the loan agreement where we provide an item, which is called institutional support, in some of the projects. For example, let’s say in the power sector, you might find the power authority of that country has a lack of expertise in certain areas. If this is the case, we put an item in the loan agreement that states we will bring experts in to train the staff that intend to work on the project.
Also, we are a major contributor in the International Development Law Organization, and this organization has a programme in the legal arena. We finance lot of local staff in many countries in that sector, also.
The Fund is indirectly also providing for micro and small businesses in the private sector, to encourage the youth and solve unemployment problems in developing countries by providing concessional loans to economic development funds, or in some places they’re called economic development banks. They don’t give the small businesses directly, they give to the social or economic development fund in developing countries, and this will be used to fund the small businesses.
In addition to concessional loans we continued contributing to provide support to the development activities of regional and international development institutions like Arab Fund for Economic and Social Development, Arab Bank for Economic Development in Africa, Africa Development Fund, The Arab Investment and Export Credit Guarantee Cooperation, African Development Bank, International Development Association, and International Fund for Agricultural Development [IFAD], Gulf Program for Development [AG Fund].
The amount paid since the creation of the Fund is around US $1.22 billion. So, basically, not only do we support countries through our loans, but we also support other funds to be able to provide assistance for even more projects.
This reflects Kuwait’s commitment cooperation with the international community, supporting international effort in achieving economic and social development.
Since the creation of the fund, 362 loans have gone to transportation sector. 120 were for agriculture, 63 in industry 150 in energy, 84 water and sewage projects, 14 for communication projects, 32 for social projects, 18 towards development banks, and then there’s 17 other miscellaneous projects.
Now, within Kuwait Fund, we have a programme to train the newly graduated Kuwaiti engineers. In the yearly programme, we train newly graduated Kuwaiti engineers so as to lessen the gap between when they submit their CV’s to the private sector, because when an employer is trying to select between graduates, he is going to pick someone who is an expert, or has at least more experience than the other. So, we are trying to cover this, to help the engineers. It is so far a very successful programme, and in fact we have some Kuwaitis who are working overseas as a result of this programme.
A: Well, we have an approved strategic plan by the board of directors, for each year. As I mentioned, on average we have KD 250 million per year. We are thinking of increasing that due to the recent situations occurring in the Arab countries, and His Highness the Amir’s initiative for Africa that was presented in the last summit. We do have a recommendation to the board to increase it.
We’re still brainstorming with the board of directors, we do have a few ideas in the works. Since we celebrated 50 years last year, there is now a thought about what we’re going to do in the next 50 years, but there’s nothing decided yet.
Marwan A. Th. Al-Ghanem, the Regional Manager for Arab Countries in the Kuwait Fund for Arab Economic Development has been working in the Fund since 1985. He began in the disbursement department and then moved to the operations department as regional manager for East, South Asia countries before becoming the regional manager for Arab countries. Al-Ghanem received his bachelor’s degree in marketing from the University of Portland, Oregon, in 1984.