The Arab Fund for Economic and Social Development

The Arab Fund for Economic and Social Development (the Arab Fund), based in the State of Kuwait, is an Arab regional financial institution focused on funding economic and social development by financing public and private investment projects and providing grants and expertise. The Arab Fund’s activities are characterized by a number of important aspects that make it a model of cooperation and Arab economic integration, and a reflection of outstanding joint Arab action.

With all the Arab countries as its members and concentrating on economic and social development affecting the same countries the Arab Fund carefully follows guidelines on neutrality in pursuing its activities and organizes itself under substantive rules to ensure independence from any political considerations when conducting its operations.

The Arab Fund seeks to meet the development needs of Member countries and at the same time ensure feasibility and transparency in all its projects. In this context the most important aspect of the Arab Fund’s operations is to consider the priorities of the projects and the policies established by the Member countries so that it does not impose any financial or economic conditions that interfere with such policies.

The loans provided by Arab Fund to Member countries are characterized as being concessional; by providing easy financing conditions to assist these countries implement their development plans. In this context, the interest rates on loans provided by the Arab Fund to member states range between 2% and  4.75%, depending on the loan term, the country group category, and the nature of the project. These include flexible repayment periods of up to a maximum of 30 years, inclusive of a grace period that does not exceed the project implementation duration plus one year, with a total cap of four years. 

As part of its efforts to preserve the environment, the Arab Fund, during 2020, launched a program to encourage and support green projects in the Arab world, and adopted special interest rates for the loans provided to finance such project, which are 2.0% for low-income Arab countries and 2.5% for other Arab countries.

Achieving Arab integration and consolidating cooperation among the Member countries is the main objective of the Arab Fund. Priority is therefore given to financing joint Arab projects of particular importance and specifically to those projects that increase the interdependence of Arab countries. Hence the emphasis on contributing to projects involving the interconnection of electrical power, transportation and communications. The Arab Fund also pays close attention to social development and reducing poverty by financing projects covering health care, education, drinking water, rural development, and social welfare.

The Arab Fund, being an Arab institution, is focused on Arab issues and concerns. In this regard it pays special attention to the least developed Arab countries such as providing support to the Palestinian people in the occupied territories through financing a program of projects in different sectors. It provides grants to support educational institutions, universities and professional and social associations. The Arab Fund has also supported a number of Arab countries in countering the effects of natural disasters and wars.

To support the Arab development goals mentioned above the Arab Fund collaborates and coordinates with Arab and international development institutions in various fields, including studies and the financing and implementation of economic and social development projects in Arab countries.

For further details on the Arab Fund’s activities, priorities, and the development of such activities since its inception in 1974 to date please refer to the financing and operations section.