While the Kuwait Fund for Arab Economic Development confirmed that its “sovereign” loans are not cancelled, written off, or waived, which is the policy followed by the Fund since its establishment, it revealed 25 countries have defaulted on the repayment of the principal loans, with a total value of arrears of installments for withdrawn and unpaid loans to 118 million Kuwaiti dinars, 90 percent of which belong to five countries — Syrian Arab Republic, the Republic of Sudan, the Republic of Yemen, the Republic of Cuba, and the Democratic People’s Republic of Korea (North Korea).
This came in a memorandum to the Fund attached by Foreign Minister Sheikh Salem Al-Sabah, in response to a parliamentary question by MP Jarrah Al-Fawzan, regarding the number of countries that defaulted or refused to repay the loans granted to them, reports Al-Rai daily.
The KFAED stated that the distressed countries “are either going through a period of political instability or are under international boycott (which prohibits the Fund from dealing with them),” noting that it “stops withdrawals on all state loans in the event that they do not commit to paying their due installments and interest on the stipulated dates.”
While stressing that it does not consider or sign any loan agreement with any of the defaulting countries unless they pay their arrears, the Fund stressed that the loans it provides are considered “sovereign loans that cannot be cancelled, written off, or waived, and this has been the policy followed by Kuwait since the establishment of the Fund.
The Fund reported that in the last 15 years the Fund has granted about 3 billion dinars in loans, while the value of grants is about 240 million dinars, 85 percent of which was to cover the obligations and pledges of the State of Kuwait for the two Syrian refugee crises and the reconstruction of affected areas in Palestine.
As for the total loans that have been repaid since the fund was established, their number reached 407, with a total value of about 2 billion dinars, until the end of July 2023, which represents 29.86 percent of the total value of loans.
According to the Fund, the loan repayment period ranges from 18 to 30 years, with an average repayment period of 23 years. “Therefore, there are other outstanding loans whose installments and interest are being paid by the borrowing countries on a regular basis.”
He explained that according to the repayment dates agreed upon in the agreements for these loans, there are 605 loans with a total lending of about 4.7 billion dinars, of which 2.2 billion dinars were withdrawn and about 1.4 billion dinars were repaid.
The Development Fund reported that the total loans it granted to the Lebanese Republic amounted to about 286 million dinars.
Regarding whether the Lebanese Ministry of Economy submitted a feasibility study to request financing silos in the port of Beirut or whether the request was made by phone call, the Fund clarified that “applications submitted to finance projects or feasibility studies are not considered except through an official written request sent by the relevant authorities in the beneficiary country, according to The request must be issued by the competent minister and this is subject to the cumbersome procedures in this regard.
