Annual Report 2014 1 Arab Fund for Economic & Social Development Annual Report 2014 Arab Fund for Economic & Social Development P.O. Box: 21923 - Safat 13080, Kuwait Telephone: +965 24 95 90 00 Facsimile: +965 24 95 93 90 / 91 / 92 Electronic Mail: [email protected]Internet Web Site: www.arabfund.org Address: Arab Organizations Headquarters Building Airport Road, Shuwaikh State of Kuwait
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Annual Report 2014 1
Arab Fund for Economic & Social Development
Annual Report 2014
Arab Fund for Economic & Social DevelopmentP.O. Box: 21923 - Safat 13080, Kuwait
Address: Arab Organizations Headquarters BuildingAirport Road, Shuwaikh
State of Kuwait
2 Annual Report 2014
Annual Report 2014 3
Arab Fund For Economic & Social Development
Member States, Governors and Alternate Governors
(1) States are listed in the order in which their names appear in the list of signatories to the Agreement Establishing the Fund, and according to the date of adhesion to the Agreement.
(2) Names of Governors and Alternate Governors are given as at 31/12/2014.
* Membership suspended pursuant to the Board of Governors’ Resolution No. 3 of 1993, which has been extended annually by subsequent resolutions of the Board of Governors until 2014.
Member States(1) Governors(2) Alternate Governors(2)
The Hashemite Kingdom of Jordan H.E. Dr. Ibrahim Saif H.E. Dr. Saleh A. Al-Kharabsheh
The Republic of Tunisia H.E. Mr. Hakim Ben Hammouda -
The Algerian Democratic and People’s Republic H.E. Mr. Mohamed Djellab -
The Republic of Sudan H.E. Mr. Bader El-Din Mahmoud Abbas -
The Republic of Iraq - -
The Kingdom of Saudi Arabia H.E. Dr. Ibrahim Bin Abd-El-Aziz Al- Assaf -
The Syrian Arab Republic - -
State of Libya H.E. Dr. Al-Kilani Abdul Karim Al-Kilani -
The Arab Republic of Egypt H.E. Dr. Naglaa Anwar El Ehwany H.E. Dr. Ashraf El-Araby
The Republic of Yemen H.E. Dr. Mohamed Al-Maitami H.E. Dr. Mohamed Ahmed Ali Al-Hawri
The State of Kuwait H.E. Mr. Anas Khalid Al Saleh H.E. Mr. Abdulwahab Al-Bader
The Republic of Lebanon H.E. Mr. Nabil Adnan Al-Jisr H.E. Mr. Alain Bifani
The Kingdom of Morocco H.E. Mr. Mohamed Boussaid H.E. Mr. Khalid Safir
United Arab Emirates H.E. Mr. Obaid Humaid Al-Tayer -
The Kingdom of Bahrain H.E. Sheikh Ahmed Bin Mohammed Al-Khalifa H.E. Mr. Yousif Abdulla Humood
The State of Qatar H.E. Mr. Ali Shareef Al Emadi -
The Somali Democratic Republic* - -
The Islamic Republic of Mauritania H.E. Dr. Sidi Ould Bebbaha Ould Tah H.E. Mr. Ahmedo Ould Ely
Sultanate of Oman H.E. Mr. Darwish Bin IsmaeelBin Ali Al-Bulushi -
Palestine H.E. Dr. Nabil Hani Al-Qaddumi H.E. Dr. Ismail El-Zabri
The Republic of Djibouti H.E. Mr. Ilyas Moussa Dawaleh -
The Union of the Comoros H.E. Mr. Mohamed Ali Soilihi -
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Director General / Chairman of the Board of Directors
Mr. Abdlatif Y. Al-Hamad
Members of the Board
Mr. Abdulwahab Al-Bader
Mr. Ibrahim Bin Mohamed Al Mofleh
Mr. Benaouda Merad
Mr. Taher Sarkez
Dr. Samir El Sayiad
Mr. Mohamed Abdulbaki
Mr. Ali Bin Mohammad Bin Jaffar
Mr. Fouzi Lekjaa
Board of Directors
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(KD Million)
Capital* 2554.9
Total Resources 3051.8
Loans
Number of Loan Agreements Signed During the Year 15
Total Amount of Loan Agreements Signed During the Year 412.5
Total Number of Loans 626
Cumulative Amount of Loan Agreements Signed 8398.7
Cumulative Disbursements on Effective Loans 5614.4
Cumulative Loan Repayments 2857.4
Outstanding Debt Owed to the Arab Fund 2757.0
Grants
Total Number of Grants 1062
Cumulative Grant Commitments 203.9
Cumulative Grant Disbursements 155.0
* During its Annual Meeting held on April 2, 2013, the Board of Governors resolved to increase the authorized capital of the Arab Fund to KD 4 billion and to raise the subscribed capital to KD 3 billion. This capital increase is to be effected through the capitalization of part of the additional reserve in the amount of KD 500 million, and by means of additional subscriptions by member states in the aggregate amount of KD 500 million, to be paid in installments over 5 years. The amount mentioned above represents the paid-in capital.
Basic Financial Data on the Arab Fund
as at 31/12/2014
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Overview of Arab Fund Activities
Introduction
During 2014, the Arab Fund’s lending program focused on continued support to Arab countries’ efforts in implementing high-priority economic and social projects. Priority was given to infrastructure projects aimed at providing basic services, increasing production capacity, and improving the investment environment. The Arab Fund also continued to allocate national and inter-Arab grants to member countries, aimed at providing institutional support and training, implementing emergency programs, organizing seminars and conferences, conducting general studies and research, as well as feasibility studies and project preparation.
Loans
During the year, the Arab Fund extended 15 loans, in 8 Arab countries, for a total amount of KD 412.5 million. These loans contributed to the implementation of 13 public sector projects, including 12 new and 1 previously financed project, as well as 2 private sector projects. The total cost of these projects was estimated at about KD 1.2 billion, with the loans provided by the Arab Fund covering about 34.2% of that amount. The share of loans provided to the energy and electricity sector represented about 31.5% of the total loan commitments during the year, and that of the social services sectors about 19.6%. The agriculture and rural development sector accounted for about 19.4%, the transport sector for about 9.7%, the water and sewerage sector for about 7.3%, the industry and mining sector for about 1.8%, and the other sectors for about 10.7%, of the total amount of loans.
Cumulative Loans
Since the commencement of its activities in 1974 and until the end of 2014, the cumulative number of loans provided by the Arab Fund to the public and private sectors has reached 626 for a total amount of about KD 8.4 billion. These loans contributed to the financing of 530 projects in 17 Arab countries, and covered about 25.3% of the total cost of these projects. The infrastructure sectors received the majority of loans extended during that period, with a share of about 69.0% of the total amount of loans, followed by the productive sectors with about 20.3%, then the social services sectors with about 7.7%, and the other sectors with about 3.0%. The cumulative number of loans extended to the private sector over that period has reached 14, for a total amount of about KD 56.0 million. Cumulative disbursements of loans extended to both the public and private sectors over the period 1974 - 2014 amounted to about KD 5.6 billion, representing about 77.0% of the net amount of effective loans. The Arab Fund also contributed to the capital of 7 private companies, for a total amount of about KD 31.7 million, in addition to its contribution to the capital of the fund established by the International Finance Corporation (IFC).
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Grants
The total amount of grants provided by the Arab Fund during 2014 reached about KD 13.1 million, and was used to execute 20 national grants and 11 inter-Arab grants, and to increase 2 national grants provided in 2013. The total amount of the national grants was about KD 10.8 million, of which about 66.0% was allocated for institutional support and training, and about 29.3% for the implementation of emergency programs. The total amount of the inter-Arab grants was about KD 2.3 million, of which about 84.8% was allocated for institutional support and training, and about 15.2% for seminars and conferences.
Cumulative Grants
The cumulative number of grants extended by the Arab Fund, since the commencement of its operations and until the end of 2014, has reached 1062, for a total amount of about KD 203.9 million. They included 560 national grants amounting to about KD 143.1 million and 502 inter-Arab grants amounting to about KD 60.8 million. About 81.9% of the net amount of these grants was disbursed.
Support to Palestine
The Arab Fund continued its annual contribution to the Urgent Program in Support of the Palestinian People, in compliance with the decisions of the Arab Fund’s Board of Governors since 2001. During 2014, the Arab Fund allocated about KD 3.4 million to the twelfth phase of the program. Thus, the total contribution of the Arab Fund to this program over the period 2001 - 2014 reached about KD 127.3 million.
Other Activities
The Arab Fund continued to act as the Coordination Secretariat of the Coordination Group, which includes the Arab national and regional development institutions, and prepare their periodic meetings. The thirteenth meeting of the Heads of these institutions took place during the year at the Arab Fund headquarters. The seventy third and seventy fourth Coordination Group meetings also took place during the year, with the participation of several international institutions.
By the end of the year, a total of 18 Arab countries had contributed to the Special Account established to finance small and medium private sector projects, in addition to the Arab Fund. Seven loans were approved during the year by the Special Account’s management committee, for a total amount of US Dollars 260.0 million. These loans were provided to governments and intermediary financial institutions in six Arab countries.
Annual Report 2014 11
The Arab Fund allocated a grant to conduct a study aimed at achieving food security for Arab countries through the Sudan project. The study comprises four tasks, two of them were completed in 2014, and it is expected that the remaining two will be completed in the first quarter of 2015.
The Arab Fund organized in cooperation with the World Bank, the Third Arab Development Symposium on “Reforming the Education System in the Arab World with the View of Enhancing Employability of Outcomes”. The Symposium aimed at providing an overview of the status of the employability of the educational sector graduates in the Arab countries.
Financial Statements
According to the Arab Fund’s financial statements for the year ending 31/12/2014, total income was about KD 92.75 million compared to about KD 87.15 million in 2013, while total administrative expenses were about KD 8.33 million compared to about KD 8.06 million in 2013. The Arab Fund’s net profit for the year 2014 was about KD 84.43 million, compared to about KD 33.51 million for the year 2013. The statements also show that total member countries’ equity was about KD 3051.76 million as at 31/12/2014, compared to about KD 2824.79 million at the end of 2013.
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First: The Lending Program
Preamble
During 2014, the Arab Fund continued to support projects that have high priority in the development plans of Arab countries and strengthen their economic and social development efforts. The lending program for the year focused mainly on projects in the energy and electric power sector, the social services sectors, and the agriculture and rural development sector. The program also included projects in the sectors of transport, water and sewerage, and industry, in addition to projects in other sectors.
Appraisal of Projects and Loan Agreements Signed
During the year, the Arab Fund studied several requests it received from member countries for financing projects. These projects were appraised by the Arab Fund’s technical staff through office work and field trips to ensure their technical and economic feasibility, and their conformity with development program priorities in member countries.
A total of 15 loan agreements were signed during the year, for a total amount of about KD 412.5 million. These loans contributed to the financing of 13 public sector projects and 2 private sector projects, in 8 Arab countries. The total cost of these projects was estimated at about KD 1.2 billion, with the loans provided by the Arab Fund covering about 34.2% of that amount.
Effective Loan Agreements
A total of 17 loan agreements with 8 Arab countries, amounting to about KD 561.0 million, became effective in 2014. These loans were provided for the implementation of strategic projects in areas that included energy, transport, agriculture, social services, water and sewerage, industrial projects, and other sectors.
Public Sector Projects
The Arab Fund extended 13 public sector loans during the year, amounting to KD 405.0 million, for the implementation of 12 new projects and 1 previously financed project. Table 1 shows the loan commitments by the Arab Fund during 2014, and Annex 1 provides the project sheets for these loans.
Infrastructure sectors accounted for about 48.5% of the total amount of loans provided during 2014, in light of priorities of member countries’ plans and programs that focused on improving these sectors, and providing an environment conducive to investment and employment opportunities. Three loans were extended to finance energy and electricity projects, and amounted to KD 130.0 million or about 31.5% of the total. These projects aim at meeting the increasing demand for electricity in both Egypt and Mauritania, through the electrical interconnection between Egypt and Saudi Arabia, the construction of a
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power generating station in Assiut, Egypt, and the construction of a solar power station in Nouakchott and the modernization of the electric system, in Mauritania. A loan was extended to the transport sector, for an amount of KD 40.0 million, or about 9.7% of the total, for the improvement of land transport in a number of Tunisian Governorates. A loan for an amount of KD 30.0 million was also extended for the completion of wastewater facilities in Lebanon.
The Arab Fund’s loans included four loans extended to the social services sectors, for a total amount of KD 81.0 million, to finance housing projects in Oman, Lebanon and Djibouti, and a hospital in Yemen. Two loans were also allocated for agriculture and rural development projects, for a total amount of KD 80.0 million, to meet the increasing demand for irrigation through the desalination of sea water in Morocco and the construction of a dam in Tunisia. The Arab Fund also provided two loans, for a total amount of KD 44.0 million, to contribute to the financing of infrastructure development projects in Sana’a, Yemen, and in an industrial area in Oman.
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Table 1Loan Commitments During 2014
No. Country ProjectAmount of Loan
(KD Million)
Date of Signature of Loan
Agreement
A: Public Sector Projects
1 Republic of Djibouti Social Housing - Phase II (Supplementary Loan) 1.0 09/03/2014
2 Arab Republic of EgyptElectrical Interconnection Between the Arab Republic of Egypt and the Kingdom of Saudi Arabia
45.0 24/03/2014
3 Arab Republic of Egypt Assiut Power Generating Station (El-Walidia) 650 MW 55.0 24/03/2014
4 Sultanate of Oman Infrastructure Facilities for Sumail Industrial Estate 14.0 08/04/2014
5 Sultanate of Oman Housing Program 40.0 08/04/2014
6 Republic of Yemen Infrastructure Development in Sana’a City 30.0 08/04/2014
7 Republic of Tunisia Regional and Rural Roads Network (Phase III) 40.0 08/04/2014
8 Republic of Lebanon Housing Project 34.0 11/05/2014
9 Republic of Lebanon Completion of Wastewater Facilities in Lebanon 30.0 11/05/2014
10 Republic of Tunisia Upper Mellegue Dam 30.0 24/06/2014
11 Islamic Republic of Mauritania
Construction of a Solar Power Station in Nouakchott and the Modernization of the Electric System
30.0 24/06/2014
12 Kingdom of Morocco Irrigation of the Chtouka Aït Baha Region with Desalinated Water 50.0 24/06/2014
13 Republic of Yemen Al Ghaydah Central Hospital 6.0 24/06/2014
Subtotal 405.0
B: Private Sector Projects
14 Arab Republic of Egypt Al Nouran Sugar 3.5 27/04/2014
15 Republic of Yemen Expansion of Flour Mills at Saleef Port 4.0 25/05/2014
Subtotal 7.5
Total 412.5
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Private Sector Projects
The Arab Fund continued to support and promote the role of the private sector in the economic and social development of Arab countries. During the year, two loans, amounting to about KD 7.5 million, were extended to contribute to the financing of two private sector projects. The first loan, for an amount of KD 4.0 million, was extended to contribute to the financing of the expansion of a flour mill factory in Yemen, which has an estimated total cost of about KD 7.6 million. The second loan, for an amount of about KD 3.5 million, was extended to contribute to the financing of a sugar production project in Egypt, which has an estimated total cost of about KD 102.2 million; the Arab Fund had previously subscribed to the capital of the project company in an amount equivalent to KD 6.5 million (Table 1). During the year, the Arab Fund studied 14 requests to participate in the financing of private sector projects in 8 Arab countries; they included 3 in the energy sector, 2 in each of the tourism, housing, health, industry, and fishing sectors, in addition to 1 project in the transport sector.
Monitoring of Projects
The Arab Fund continued to monitor the progress of ongoing projects, follow up the fulfillment of the covenants set forth in their loan agreements, and take the necessary steps to ensure their proper implementation. During 2014, 5 projects were completed; their total cost amounted to about KD 103.0 million, with the Arab Fund covering about 60.7% of that cost.
Cumulative Lending Activities
Since the commencement of its operations in 1974 and until the end of 2014, the Arab Fund extended 626 loans, for a total amount of about KD 8.4 billion. These loans contributed to the financing of 530 projects in 17 Arab countries, and covered about 25.3% of the total cost of these projects. Annex 3 presents a summary of the loans extended to member countries over the period 1974 – 2014, and Annex 5 provides details on these loans.
The cumulative amount of loans extended by the Arab Fund for infrastructure projects has reached about KD 5.8 billion, or about 69.0% of the total amount of loans, of which about KD 2.7 billion was allocated for energy and electricity projects, about KD 2.2 billion for transport and telecommunications projects, and about KD 0.9 billion for water and sewerage projects.
Loans for the productive sector projects amounted to about KD 1.7 billion, or about 20.3% of the total amount of loans, of which about KD 1.2 billion was allocated for projects in agriculture and rural development, and about KD 0.5 billion for projects in industry and mining. Loans for projects in the social services sectors amounted to about KD 0.6 billion, accounting for about 7.7% of the total, and were allocated to projects in education, health, housing and social development. The remaining 3.0% of the total amount of loans, about KD 0.3 billion, was provided to finance projects in other sectors.
In addition to financing the main components of projects, the Arab Fund’s loans also contributed to institutional support of the entities involved and training of their employees in order to enhance their efficiency. Table 2 shows the sectoral distribution of the loans extended by the Arab Fund during 2014 and over the period 1974 – 2014, while Annex
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4 provides a summary of that distribution among beneficiary member countries over the same period.
The cumulative lending activities of the Arab Fund also included 14 loans for private sector projects, for a total amount of KD 56.0 million, which contributed to 12 projects in Bahrain, Yemen, Mauritania, Sudan, Jordan and Egypt. These projects covered various areas, as they included the development of the productive sectors, especially iron and steel, sugar, grain silos and flour mills, glass and cement, as well as the tourism, health and financial sectors. In addition to the loans extended to the private sector, the Arab Fund also contributed to the equity capital of 7 private companies in 4 Arab countries, namely Saudi Arabia, Egypt, Yemen and Sudan, in the areas of glass container manufacturing, iron and steel production, cement production, sugar production, power generation, healthcare services and storage facilities. By the end of 2014, the Arab Fund’s total contributions to these companies had reached about KD 31.7 million, in addition to its contribution to the capital of the fund established by the International Finance Corporation (IFC) in an amount of KD 10 million.
Inter-Arab Projects
The Arab Fund maintained its support to joint Arab efforts to build a basic framework and to strengthen means of communication and interconnections between member countries. Since the start of its operations in 1974 and until the end of 2014, the Arab Fund extended 68 loans for a total amount of about KD 394.1 million. These loans contributed to the implementation of 32 inter-Arab projects in the areas of telecommunications, electric power, natural gas and international roads. Total disbursements of these loans have reached about KD 291.7 million at the end of 2014, or about 82.7% of their net amount. Annex 6 provides details on the loans extended by the Arab Fund to finance inter-Arab projects over the period 1974 – 2014.
Co-Financing Activities
The Arab Fund also continued its co-financing of projects in Arab countries with Arab national, regional and international development institutions. During 2014, two projects were co-financed with other institutions. These projects included the electrical interconnection between Egypt and Saudi Arabia, and a hospital in Yemen. During the period 1974 – 2014, the total contribution of the Arab Fund to projects co-financed with Arab national, regional and international development institutions has reached about KD 3.7 billion, representing about 31.2% of the total amount of co-financing of about KD 12.0 billion. Annex 8 provides details on co-financing activities over that period.
Disbursements and Repayments
Total disbursements during 2014 amounted to about KD 257.8 million, of which about KD 0.2 million were disbursed to finance private sector projects. Cumulative disbursements of all loans over the period 1974 – 2014 have amounted to about KD 5614.4 million, including KD 39.6 million for private sector projects. Repayments of loans in 2014 amounted to about KD 159.1 million, of which about KD 1.4 million were from the private sector. Cumulative repayments over the period 1974 – 2014 have amounted to about KD 2857.4 million, which represented about 50.9% of cumulative disbursements.
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Sectoral Distribution of Loan Commitments (Percentage)
Sector2014 1974 - 2014
Amount % Amount %
1. Infrastructure Sectors
Transport and Telecommunications 40.00 9.7 2177.90 25.9
Energy and Electricity 130.00 31.5 2750.75 32.8
Water and Sewerage 30.00 7.3 867.25 10.3
Subtotal 200.00 48.5 5795.90 69.0
2. Productive Sectors
Industry and Mining 7.50 1.8 479.70 5.7
Agriculture and Rural Development 80.00 19.4 1226.80 14.6
Subtotal 87.50 21.2 1706.50 20.3
3. Social Services Sectors* 81.00 19.6 645.50 7.7
4. Other Sectors** 44.00 10.7 250.83 3.0
Grand Total 412.50 100.0 8398.73 100.0
* Include Education, Health, Housing and Social Development.** Include Loan Commitments for Emergency Projects.
Table 2 Loan Commitments by Sector
(KD Million)
During the Period 1974 - 2014
Water &Sewerage
10.3%
Industry & Mining
5.7%
Energy &Electricity
32.8%
Transport & Telecom.
25.9%
OtherSectors3.0%
Agriculture & Rural Dev.
14.6%
Social Services
7.7%
During 2014
Water &Sewerage
7.3% Industry &
Mining1.8%
Energy &Electricity
31.5%
Transport & Telecom.
9.7%
OtherSectors10.7%
Agriculture & Rural Dev.
19.4%
Social Services19.6%
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Second: Grants
Grants During 2014
The total amount of grants provided by the Arab Fund during 2014 reached about KD 13.1 million, and was used to execute 20 national grants and 11 inter-Arab grants, and to increase 2 national grants provided in 2013. The total amount of the national grants was about KD 10.8 million, and was provided to 12 Arab countries. The total amount of the inter-Arab grants was about KD 2.3 million, and was allocated to support activities of common interest to most Arab countries. Table 3 presents the national and inter-Arab grants approved during 2014. The Arab Fund continued to give priority to activities that reinforce institutional support and training, with 22 grants allocated to these activities for a total amount of about KD 9.1 million, representing about 69.4% of total grants provided during the year. These grants included 18 national grants for a total amount of about KD 7.1 million, and 4 inter-Arab grants for a total amount of about KD 2.0 million. These grants aimed at enhancing the performance of specialized institutions, supporting the activities of research and education centers, as well as the activities of economic and social institutions. The grants also aimed at providing advanced medical equipment and supplies to support health services, preserving heritage, and improving food security in Arab countries.
The grants included strengthening the implementation of emergency programs, by increasing the amounts allocated to 2 grants provided in 2013 by about KD 3.2 million, or about 29.3% of the total amount of grants for 2014. These 2 grants contributed to the projects and programs for the urgent relief of Syrian refugees in Lebanon and Jordan. The grants provided during the year also contributed to the organization of a number of seminars and conferences on topics of common interest to most Arab countries, as well as the preparation of studies in some of those countries. Table 4 shows the grant commitments by activity.
Cumulative Grants
Since the beginning of its operations and until the end of 2014, the Arab Fund provided 1062 grants for a total amount of about KD 203.9 million. They included 560 national grants, amounting to about KD 143.1 million, which were allocated as follows: about KD 71.2 million for institutional support and training, about KD 16.8 million for feasibility studies and project preparation, about KD 5.6 million for general studies and research, and about KD 164 thousand for seminars and conferences. These grants aimed at improving the performance of specialized institutions, enhancing the quality of services they provide, training their employees and managers, developing their information systems and statistics, undertaking population censuses, supporting the activities of several research centers, and preserving national heritage. Furthermore, national grants included grants
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for a total amount of about KD 49.3 million, which were allocated to support emergency programs to alleviate the effects of natural disasters, local disturbances, or damage caused by external aggression in some Arab countries.
The grants provided over the same period also included 502 inter-Arab grants, amounting to about KD 60.8 million, which were allocated as follows: about KD 34.6 million to provide institutional support and training programs in several specialized scientific and research centers, about KD 13.1 million to undertake general studies and research in various economic and social development areas, about KD 6.4 million to conduct feasibility studies for specific projects, about KD 4.7 million to organize seminars and conferences to discuss priority development issues for Arab countries, in addition to about KD 2.0 million to implement emergency programs.
Grant Disbursements Cumulative disbursements of grants approved over the period 1974 – 2014 amounted to about KD 155.0 million, which constitutes approximately 81.9% of the net amount of grants. Annex 7 provides a summary of the grants committed and disbursed over that period. During 2014, a total of 17 grants, amounting to about KD 6.5 million, were completed. This brought the total number of grants completed during the period 1974 – 2014 to 882, with a cumulative amount of about KD 135.8 million, while a total of 138 grants, amounting to about KD 59.8 million, remained under execution.
Support to the Palestinian People
The total amount of contributions made by the Arab Fund to Palestine, since the beginning of its operations and until the end of 2014, reached about KD 172.8 million, including about KD 155.8 million in the form of grants, and the remaining in the form of loans provided to the Palestinian National Authority.
The Urgent Program: The Arab Fund continued its efforts to support the Palestinian people and limit the deterioration of the economic and social conditions in the occupied territories. During 2014, the Arab Fund allocated an amount of about KD 3.4 million, or about 10.0% of the Arab Fund’s net income for 2013, to contribute to the twelfth phase of the Urgent Program to Support the Palestinian People, initially started in 2001. Thus, the total contribution of the Arab Fund to this program over the period 2001 – 2014 reached about KD 127.3 million. This program provided support to educational institutions, enabled thousands of students to attend university by covering tuition fees for many of them, allowed for training and qualification of graduates, and contributed to the rehabilitation of school buildings to meet educational needs. The program also provided support to social institutions and civil society entities to enable them to provide the best services in areas of social welfare, maternal care and child care, handicapped and those with special needs, and orphanages. Areas of the program’s intervention also included support to small and medium enterprises, housing for marginalized groups, rural development, reconstruction
Annual Report 2014 21
of historical buildings in old cities in Jerusalem, Nablus, and Hebron, and support to small farmers and craftsmen. The support also included provision of medical devices and equipment to hospitals and medical centers, contributions to the construction of health centers specializing in cardiology, ophthalmology, maternity and primary health care, in addition to the development of infrastructure such as water and electricity facilities, and delivery of potable water to deprived areas.
The Arab Fund provided support to Palestine through cooperation and coordination with civil society entities and some governmental institutions. This support contributed to the preservation of the various institutions and civil society entities, and enabled them to provide the best services to the Palestinian community. This program also reinforced the perseverance of the Palestinian residents and their presence in Palestine, and the preservation of their right to reside and live in the Holy City in the face of the expulsion campaigns, and contributed to the improvement of their living and environmental conditions by providing them with suitable housing, health, educational, cultural and social services.
Cooperation with International and National Financial Institutions: The Arab Fund continued its administration and follow up of grants provided by the OPEC Fund for International Development to Palestine. The total number of grants reached 356, amounting to about US Dollars 65.8 million. Disbursements of these grants amounted to about US Dollars 59.3 million, or about 90.1% of the total. The Arab Fund also maintained its cooperation with the Islamic Development Bank, which monitors the implementation of projects financed through Al-Aqsa Fund. This cooperation included support to rural development projects, economic empowerment, urgent reconstruction of historic buildings, construction of roads and schools, rehabilitation of water wells, reclamation of agricultural land, coverage of tuition and fees of university students, and support to non-governmental organizations that provide health, social and educational services. The total committed amount is estimated at about KD 29.3 million, including support to Jerusalem, and the disbursed amount reached about KD 22.0 million, or about 75.1%. Coordination between the Arab Fund and the Islamic Development Bank also included the selection of projects to be financed under the twelfth phase of the urgent program.
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Grants Approved During 2014Table 3
No. Beneficiary/Grant Amount Allocated(KD 000) No. of Grant Date of Board Approval
A: National Grants1 Mauritania/ Contribution to the Update of the Sewerage Studies for Nouakchott (1) 200 1/2014 05/03/20142 Egypt/ Contribution to Support the Activities of the “Friends of Ahmed Bahaa El Din” Society (2) 50 2/2014 05/03/20143 Palestine/ Support to the Information Center of the Institute for Palestinian Studies (2) 30 4/2014 05/03/20144 Lebanon/ Support to the Children’s Cancer Center of Lebanon to Cover the Cost of Surgery for Children 2014 - 2016 (2) 300 5/2014 05/03/2014
5 Lebanon/ Completion of the Construction and Furnishing of a Rehabilitation Institute for Orphans and Disabled Children in Rahma Medical Center in Tripoli (2) 100 6-1/2014 05/03/2014
6 Lebanon/ Completion of the Construction and Furnishing of a Rehabilitation Institute for Orphans and Disabled Children in Rahma Medical Center in Tripoli (2) 100 6-2/2014 05/03/2014
7 Comoros/ Institutional Support to the Main Public Services and Institutions (2) 100 9-12/2014 31/03/2014
8 Egypt/ Contribution to the Financing of the Second Phase of the Project for the Development and Enhancement of Cairo’s Fatamid Neighborhoods (2) 300 10/2014 07/04/2014
9 Yemen/ Contribution to the Financing of the Fourth Phase of the Program to Restore and Rehabilitate the Grand Mosque in Old Sana’a (2) 500 11/2014 07/04/201410 Sudan/ Contribution to the Financing of the “Saving Sight in North Kordofan Governorate” Program (2) 250 14/2014 07/04/2014* Lebanon/ Contribution to the Projects and Programs for the Urgent Relief of Syrian Refugees in Lebanon (5) 1579 17/2013 09/04/2014
* * Jordan/ Contribution to the Projects and Programs for the Urgent Relief of Syrian Refugees in Jordan (5) 1579 18/2013 09/04/201411 Tunisia/ Contribution to the Financing of a Study on the Restructuring of the Public Banking Sector (3) 300 16/2014 08/06/201412 Lebanon/ Contribution to the Project on the “Design and Development of the Electronic Content in Science and Mathematics” (2) 300 17/2014 08/06/201413 Lebanon/ Contribution to the Financing of a Water Treatment Project at Dar Al-Ajaza Al Islamia Hospital in Beirut (2) 100 20/2014 08/06/201414 Yemen/ Contribution to the Financing of the Establishment of a Training Center for Alrahma Foundation for Human Development (2) 400 22/2014 08/06/2014
15 Lebanon/ Support to the Activities of the Friends Committee of the Social Welfare Institution – Dar Al Aytam Al Islamiya – “Ashghalouna” (2) 50 24/2014 24/07/2014
16 Comoros/ Hydroelectric Generating Units (2) 3000 26/2014 22/12/2014
17 Algeria/ Contribution to the Financing of the Project to Support the Capabilities of Management of Public Banks and Banking Supervision(2) 130 27/2014 22/12/2014
18 Bahrain/ Contribution to the Financing of the Project on the Development of Neighborhoods in Muharraq (2) 250 28/2014 22/12/201419 Lebanon/ Completion of the Construction of a Second Building for the Al Islah Islamic High School in Lebanon (2) 250 29/2014 22/12/201420 Somalia/ Contribution to the Somalia Trust Fund for Capacity Development in Macroeconomic Policies and Statistics (2) 900 30/2014 22/12/2014
Subtotal 10768
(1) Feasibility Studies and Project Preparation (2) Institutional Support and Training(3) General Studies and Research (4) Seminars and Conferences(5) Emergency Programs
* The amount of grant no. 17/2013 was increased by KD 1579 thousand, to become KD 3 million.** The amount of grant no. 18/2013 was increased by KD 1579 thousand, to become KD 3 million.
22 Annual Report 2014
Gra
nts
App
rove
d D
urin
g 20
14Ta
ble
3
No.
Ben
efic
iary
/Gra
ntA
mou
nt A
lloca
ted
(KD
000
)N
o. o
f G
rant
Dat
e of
Boa
rd A
ppro
val
A: N
atio
nal G
rant
s1
Mau
ritan
ia/ C
ontri
butio
n to
the
Upd
ate
of th
e Se
wer
age
Stud
ies f
or N
ouak
chot
t (1)
200
1/20
1405
/03/
2014
2Eg
ypt/
Con
tribu
tion
to S
uppo
rt th
e Act
iviti
es o
f the
“Fr
iend
s of A
hmed
Bah
aa E
l Din
” So
ciet
y (2
)50
2/20
1405
/03/
2014
3Pa
lest
ine/
Sup
port
to th
e In
form
atio
n C
ente
r of t
he In
stitu
te fo
r Pal
estin
ian
Stud
ies (2
)30
4/20
1405
/03/
2014
4Le
bano
n/ S
uppo
rt to
the C
hild
ren’
s Can
cer C
ente
r of L
eban
on to
Cov
er th
e Cos
t of S
urge
ry fo
r Chi
ldre
n 20
14 -
2016
(2)
300
5/20
1405
/03/
2014
5Le
bano
n/ C
ompl
etio
n of
the
Con
stru
ctio
n an
d Fu
rnis
hing
of a
Reh
abili
tatio
n In
stitu
te fo
r Orp
hans
and
Dis
able
d C
hild
ren
in R
ahm
a M
edic
al C
ente
r in
Trip
oli (2
)10
06-
1/20
1405
/03/
2014
6Le
bano
n/ C
ompl
etio
n of
the
Con
stru
ctio
n an
d Fu
rnis
hing
of a
Reh
abili
tatio
n In
stitu
te fo
r Orp
hans
and
Dis
able
d C
hild
ren
in R
ahm
a M
edic
al C
ente
r in
Trip
oli (2
)10
06-
2/20
1405
/03/
2014
7C
omor
os/ I
nstit
utio
nal S
uppo
rt to
the
Mai
n Pu
blic
Ser
vice
s and
Inst
itutio
ns (2
)10
09-
12/2
014
31/0
3/20
14
8Eg
ypt/
Con
tribu
tion
to th
e Fi
nanc
ing
of th
e Se
cond
Pha
se o
f the
Pro
ject
for t
he D
evel
opm
ent a
nd E
nhan
cem
ent o
f C
airo
’s F
atam
id N
eigh
borh
oods
(2)
300
10/2
014
07/0
4/20
14
9Ye
men/
Contr
ibutio
n to t
he F
inanc
ing of
the F
ourth
Pha
se of
the P
rogr
am to
Res
tore a
nd R
ehab
ilitat
e the
Gran
d Mos
que i
n Old
Sana
’a (2
)50
011
/201
407
/04/
2014
10Su
dan/
Con
tribu
tion
to th
e Fi
nanc
ing
of th
e “S
avin
g Si
ght i
n N
orth
Kor
dofa
n G
over
nora
te”
Prog
ram
(2)
250
14/2
014
07/0
4/20
14*
Leba
non/
Con
tribu
tion
to th
e Pr
ojec
ts a
nd P
rogr
ams f
or th
e U
rgen
t Rel
ief o
f Syr
ian
Ref
ugee
s in
Leba
non
(5)
1579
17/2
013
09/0
4/20
14*
*Jo
rdan
/ Con
tribu
tion
to th
e Pr
ojec
ts a
nd P
rogr
ams f
or th
e U
rgen
t Rel
ief o
f Syr
ian
Ref
ugee
s in
Jord
an (5
)15
7918
/201
309
/04/
2014
11Tu
nisi
a/ C
ontri
butio
n to
the
Fina
ncin
g of
a S
tudy
on
the
Res
truct
urin
g of
the
Publ
ic B
anki
ng S
ecto
r (3)
300
16/2
014
08/0
6/20
1412
Leba
non/
Con
tribu
tion
to th
e Pro
ject o
n th
e “De
sign
and
Deve
lopm
ent o
f the
Elec
troni
c Con
tent i
n Sc
ience
and
Math
emati
cs” (2
)30
017
/201
408
/06/
2014
13Le
bano
n/ C
ontri
butio
n to
the
Fina
ncin
g of
a W
ater
Tre
atm
ent P
roje
ct a
t Dar
Al-A
jaza
Al I
slam
ia H
ospi
tal i
n Be
irut (2
)10
020
/201
408
/06/
2014
14Ye
men
/ Con
tribu
tion t
o the
Fin
ancin
g of t
he E
stabl
ishm
ent o
f a T
rain
ing C
enter
for A
lrahm
a Fou
ndati
on fo
r Hum
an D
evelo
pmen
t (2)
400
22/2
014
08/0
6/20
14
15Le
bano
n/ S
uppo
rt to
the A
ctiv
ities
of t
he F
riend
s Com
mitt
ee o
f the
Soc
ial W
elfa
re In
stitu
tion
– D
ar A
l Ayt
am A
l Is
lam
iya
– “A
shgh
alou
na” (2
) 50
24/2
014
24/0
7/20
14
16C
omor
os/ H
ydro
elec
tric
Gen
erat
ing
Uni
ts (2
)30
0026
/201
422
/12/
2014
17A
lger
ia/ C
ontri
butio
n to
the
Fina
ncin
g of
the
Proj
ect t
o Su
ppor
t the
Cap
abili
ties o
f Man
agem
ent o
f Pub
lic B
anks
an
d B
anki
ng S
uper
visi
on(2
)13
027
/201
422
/12/
2014
18B
ahra
in/ C
ontri
butio
n to
the
Fina
ncin
g of
the
Proj
ect o
n th
e D
evel
opm
ent o
f Nei
ghbo
rhoo
ds in
Muh
arra
q (2
)25
028
/201
422
/12/
2014
19Le
bano
n/ C
ompl
etio
n of
the
Con
stru
ctio
n of
a S
econ
d B
uild
ing
for t
he A
l Isl
ah Is
lam
ic H
igh
Scho
ol in
Leb
anon
(2)
250
29/2
014
22/1
2/20
1420
Som
alia
/ Con
tribu
tion
to th
e So
mal
ia T
rust
Fund
for C
apac
ity D
evel
opm
ent i
n M
acro
econ
omic
Pol
icie
s and
Sta
tistic
s (2)
900
30/2
014
22/1
2/20
14Su
btot
al10
768
(1) F
easi
bilit
y St
udie
s an
d Pr
ojec
t Pre
para
tion
(2)
Inst
itutio
nal S
uppo
rt an
d Tr
aini
ng(3
) Gen
eral
Stu
dies
and
Res
earc
h
(4)
Sem
inar
s an
d C
onfe
renc
es(5
) Em
erge
ncy
Prog
ram
s
* Th
e am
ount
of g
rant
no.
17/
2013
was
incr
ease
d by
KD
157
9 th
ousa
nd, t
o be
com
e KD
3 m
illion
.**
The
am
ount
of g
rant
no.
18/
2013
was
incr
ease
d by
KD
157
9 th
ousa
nd, t
o be
com
e KD
3 m
illion
.
Annual Report 201423
Grants Approved During 2014Table 3 (continued)
No. Beneficiary/Grant Amount Allocated(KD 000) No. of Grant Date of Board Approval
B: Inter-Arab Grants
1 Inter-Arab (OAPEC)/ Coverage of Half the Expenses of the 10th Arab Energy Conference to be held in Abu Dhabi (4) 100 3/2014 05/03/2014
3 ICARDA/ Contribution to Support the Development of ICARDA’s Regional Offices in Jordan, Lebanon, Egypt, Morocco and Tunisia (2) 1000 8/2014 05/03/2014
4 Arab Planning Institute/ Contribution to the Institute’s Programs and Activities for the Year 2013/2014 (2) 100 12/2014 07/04/2014
5 Inter-Arab (Arab Fund)/ Contribution to the Financing of a Symposium on “Reforming the Education System in the Arab World with the View of Enhancing Employability of Outcomes” (4) 50 13/2014 07/04/2014
6 ERF/ Contribution to the Financing of the Activities of the Arab Spring Initiative for Development during the Period 2014 - 2015 (2) 260 15/2014 07/04/2014
7 Gulf Research Center/ Contribution to the Financing of the Fifth Gulf Research Forum (4) 20 18/2014 08/06/2014
8 Inter-Arab/ Contribution to the Financing of the First Arab Conference on Higher Education and Integrated Development at the University of Hadramout (4) 30 19/2014 08/06/2014
9 Arab Forum for Environment and Development/ Contribution to the Financing of the Seventh Annual Conference (4) 30 21/2014 08/06/2014
10 ICARDA/ Contribution to the Financing of the Second Phase of the Project on the Enhancement of Food Security in Arab Countries (2) 600 23/2014 08/06/2014
11 Inter-Arab/ Printing of Documents and Publications of the Eleventh Gulf Conference on Water (4) 20 DG/25-2014 15/10/2014
Subtotal 2310
Total 13078
(1) Feasibility Studies and Project Preparation (2) Institutional Support and Training(3) General Studies and Research (4) Seminars and Conferences(5) Emergency Programs
Annual Report 2014 23
Gra
nts
App
rove
d D
urin
g 20
14Ta
ble
3 (c
ontin
ued)
No.
Ben
efic
iary
/Gra
ntA
mou
nt A
lloca
ted
(KD
000
)N
o. o
f G
rant
Dat
e of
Boa
rd A
ppro
val
B: In
ter-
Ara
b G
rant
s
1In
ter-A
rab
(OA
PEC)
/ Cov
erag
e of
Hal
f the
Exp
ense
s of t
he 1
0th A
rab
Ener
gy C
onfe
renc
e to
be
held
in A
bu D
habi
(4)
100
3/20
1405
/03/
2014
2ER
F/ S
uppo
rting
ER
F’s T
wen
tieth
Ann
ual M
eetin
g (4
)10
07/
2014
05/0
3/20
14
3IC
AR
DA
/ Con
tribu
tion
to S
uppo
rt th
e D
evel
opm
ent o
f IC
AR
DA’
s R
egio
nal O
ffice
s in
Jor
dan,
Leb
anon
, Egy
pt,
Mor
occo
and
Tun
isia
(2)
1000
8/20
1405
/03/
2014
4A
rab
Plan
ning
Inst
itute
/ Con
tribu
tion
to th
e In
stitu
te’s
Pro
gram
s and
Act
iviti
es fo
r the
Yea
r 201
3/20
14 (2
)10
012
/201
407
/04/
2014
5In
ter-A
rab
(Ara
b Fu
nd)/
Con
tribu
tion
to th
e Fi
nanc
ing
of a
Sym
posi
um o
n “R
efor
min
g th
e Ed
ucat
ion
Syst
em in
the
Ara
b W
orld
with
the
Vie
w o
f Enh
anci
ng E
mpl
oyab
ility
of O
utco
mes
” (4)
5013
/201
407
/04/
2014
6ER
F/ C
ontri
butio
n to
the F
inan
cing
of t
he A
ctiv
ities
of t
he A
rab
Sprin
g In
itiat
ive f
or D
evel
opm
ent d
urin
g th
e Per
iod
2014
- 20
15 (2
)26
015
/201
407
/04/
2014
7G
ulf R
esea
rch
Cen
ter/
Con
tribu
tion
to th
e Fi
nanc
ing
of th
e Fi
fth G
ulf R
esea
rch
Foru
m (4
) 20
18/2
014
08/0
6/20
14
8In
ter-A
rab/
Con
tribu
tion
to t
he F
inan
cing
of
the
Firs
t A
rab
Con
fere
nce
on H
ighe
r Ed
ucat
ion
and
Inte
grat
ed
Dev
elop
men
t at t
he U
nive
rsity
of H
adra
mou
t (4)
3019
/201
408
/06/
2014
9A
rab
Foru
m fo
r Env
ironm
ent a
nd D
evel
opm
ent/
Cont
ribut
ion
to th
e Fi
nanc
ing
of th
e Se
vent
h A
nnua
l Con
fere
nce
(4)
3021
/201
408
/06/
2014
10IC
AR
DA
/ Con
tribu
tion
to th
e Fi
nanc
ing
of th
e Se
cond
Pha
se o
f the
Pro
ject
on
the
Enha
ncem
ent o
f Foo
d Se
curit
y in
Ara
b C
ount
ries (2
)60
023
/201
408
/06/
2014
11In
ter-A
rab/
Prin
ting
of D
ocum
ents
and
Pub
licat
ions
of t
he E
leve
nth
Gul
f Con
fere
nce
on W
ater
(4)
20D
G/2
5-20
1415
/10/
2014
Subt
otal
2310
Tota
l13
078
(1) F
easi
bilit
y St
udie
s an
d Pr
ojec
t Pre
para
tion
(2)
Inst
itutio
nal S
uppo
rt an
d Tr
aini
ng(3
) Gen
eral
Stu
dies
and
Res
earc
h
(4)
Sem
inar
s an
d C
onfe
renc
es(5
) Em
erge
ncy
Prog
ram
s
24Annual Report 2014
Grant Commitments by Activity(KD 000)
Table 4
Activity
During 2014 During the Period 1974 - 2014
National Grants Inter-Arab Grants Total National Grants Inter-Arab Grants Total
* Does not include an amount of about KD 127.3 million allocated by the Board of Governors of the Arab Fund to support the Palestinian people, over the period 2001 - 2014.
24 Annual Report 2014
Gra
nt C
omm
itm
ents
by
Act
ivit
y(K
D 0
00)
Tabl
e 4
Act
ivity
Dur
ing
2014
Dur
ing
the
Peri
od 1
974
- 201
4
Nat
iona
l Gra
nts
Inte
r-A
rab
Gra
nts
Tota
lN
atio
nal G
rant
sIn
ter-
Ara
b G
rant
sTo
tal
Am
ount
%A
mou
nt%
Am
ount
%A
mou
nt%
Am
ount
%A
mou
nt%
1Fe
asib
ility
Stu
dies
and
Pr
ojec
t Pre
para
tion
200
1.9
200
1.5
1682
011
.863
8010
.523
200
11.4
2In
stitu
tiona
l Sup
port
and
Tr
aini
ng71
1066
.019
6084
.890
7069
.471
185
49.7
3460
556
.910
5790
51.9
3G
ener
al S
tudi
es a
nd
Res
earc
h30
02.
830
02.
356
003.
913
071
21.5
1867
19.
1
4Se
min
ars a
nd C
onfe
renc
es35
015
.235
02.
716
40.
147
597.
849
232.
4
5 Em
erge
ncy
Prog
ram
s31
5829
.331
5824
.149
319
34.5
2000
3.3
5131
925
.2
To
tal*
10768
100.0
2310
100.0
13078
100.0
143088
100.0
60815
100.0
203903
100.0
* D
oes
not i
nclu
de a
n am
ount
of a
bout
KD
127
.3 m
illion
allo
cate
d by
the
Boar
d of
Gov
erno
rs o
f the
Ara
b Fu
nd to
sup
port
the
Pale
stin
ian
peop
le,
over
the
perio
d 20
01 -
2014
.
Annual Report 2014 25
National Grants during 2014
National Grants during the Period 1974 - 2014
Grant Commitments by Activity(Percentage)
Inst. Support & Training
66.0%
EmergencyPrograms
29.3%
Feasibility Studies &
Project Prep. 1.9%
General Studies & Research
2.8%
Inst. Support & Training
49.7%
Emergency Programs
34.5%
Feasibility Studies & Project Prep.
11.8%
General Studies & Research
3.9%
Seminars & Conf.
0.1%
Inter-Arab Grants during 2014
Inter-Arab Grants during the Period 1974 - 2014
Seminars & Conf.15.2%
Inst. Support& Training
84.8%
Feasibility Studies &
Project Prep.10.5% Inst. Support
& Training56.9%
General Studies & Research
21.5%
Emergency Programs
3.3%
Seminars & Conf.
7.8%
26 Annual Report 2014
The Arab Fund’s Graduate Program for Palestinian Students
In 2012 the Arab Fund established, in cooperation with the British Council in Jerusalem, the Graduate Program for Palestinian Students at British Universities, with the aim to develop their educational and academic abilities. This program is considered to be the largest of its kind for Palestinians in the United Kingdom. It provides grants to Palestinian students who excel in their fields of specialization, to study at prestigious British universities to obtain their masters or doctorate degrees, and then work at Palestinian universities in the areas of research and teaching, to transfer the acquired knowledge, teaching methods and research they gain to those universities.
This program contributes to the training and qualification of the academicians who work at Palestinian universities, with the aim to raise the academic competencies and maintain international standards at Palestinian universities, and reinforce their educational capabilities, as well as strengthen the links between British and Palestinian universities. To date, the program has provided 51 grants to Palestinian students from 16 Palestinian universities, to study at 18 prestigious British universities for the masters or doctorate degrees in their fields of specialization. The graduate program includes business administration, economics and finance, educational management, political science, international studies, governance, agriculture, engineering, law, environmental studies, nursing, information technology, clean energy and energy management.
The program is being implemented under the management and supervision of the British Council, which provides grants to study at the British universities, while the Arab Fund covers all the students’ expenses, including travel and housing expenses, in the United Kingdom.
The program has resulted in additional advantages, by allowing the students to benefit from the British educational and academic experiences. It also provided some of the students with the opportunity to work with scientists who are distinguished in their field of specialization, as well as the opportunity to work at some of the best scientific research laboratories in many fields. The program also contributed to the strengthening of ties between British and Palestinian universities. It is expected that this program will be implemented yearly, in order to meet the continued demand to raise competencies.
Annual Report 2014 27
Third: Other Activities
Coordination between the Arab National1. and Regional Development Institutions
The Arab Fund continued to act as the Coordination Secretariat of the Coordination Group, which includes the Arab national and regional development institutions, and preparing their periodic meetings and the meetings of the technical committees. The thirteenth meeting of the Heads of these institutions took place on January 19, 2014, at the Arab Fund headquarters in Kuwait. During that meeting, the heads of the institutions discussed topics relating to the intensification of support to Arab countries going through a transition period and expanding the support to include all Arab countries, by combining bilateral initiatives and co-financing on the one hand, and the development of joint operations between the Group’s institutions and the Development Assistance Committee of the Organisation for Economic Co-operation and Development (OECD/DAC) on the other hand. The Heads of institutions meeting was followed by a High Level meeting between the Coordination Group and DAC on January 20, 2014, at the Arab Fund headquarters. During that meeting, the participants discussed topics related to the promotion and development of their joint efforts to support development in the world, and particularly in Arab countries.
The Arab Fund, along with representatives of the Coordination Group institutions, participated in the First High-Level Meeting of the Global Partnership for Effective Development Co-operation, which was held in Mexico City, Mexico, during the period 15 – 16/4/2014. The meeting was attended by about 1500 delegates representing more than 130 countries, along with representatives from international and regional financial institutions, parliaments, the private sector, unions and civil society organizations.
During the year, the seventy third and seventy fourth Coordination Group meetings took place, with the participation of several international institutions, including the World Bank, the International Finance Corporation, the German Institution for International Cooperation (GIZ), the Arab Authority for Agricultural Investment and Development, and the OECD. The meetings aimed at studying and discussing ways and means to strengthen and expand cooperation, to include existing projects in the beneficiary countries, especially projects in the sectors of infrastructure, agriculture, rural development, energy, education and health.
The Arab Fund also participated in the eighth meeting to strengthen cooperation between trade finance and guarantee institutions, that took place at the Saudi Fund for Development headquarters in Riyadh, Saudi Arabia, during the period 10 – 11/9/2014. This meeting brought together the Coordination Group member institutions that specialize in trade finance programs and export credit. The focus of the meeting was on the importance of expanding credit and conducting certain operations in the African markets, in order to increase the level of Arab exports to African countries. An agreement was reached to prepare a final report on the initiative of an Arab Africa Trade Bridge Program, to enhance commercial trade between Arab and African countries.
28 Annual Report 2014
Management of Special Account2.
By the end of the year, a total of 18 Arab countries had contributed to the Special Account, in addition to the Arab Fund, with total pledged contributions reaching US Dollars 1310.0 million, of which US Dollars 1262.5 million were paid.
Special Account projects were studied during the year in eight Arab countries, through evaluation of the needs of small and medium enterprises, and determination of financial intermediaries eligible to borrow from the Special Account to finance these projects. In addition, visits were made to several institutions, both governmental and non-governmental, that work towards the development of small and medium enterprises, in order to inquire about their activities and their needs.
Seven loans were approved during the year by the Special Account’s management committee, for a total amount of US Dollars 260.0 million. These loans were provided to governments and intermediary financial institutions in Palestine, Djibouti, Bahrain, Oman, Tunisia and Egypt. Table 5 shows the loan commitments by the Special Account during 2014. This brings the total number of loans approved by the management committee to 23, for a total amount of US Dollars 748.0 million.
Table 5Loan Commitments Approved by the Special Account’s
Management Committee During 2014
No. Country Institution
Amount of Loan (Million
US Dollars)
Date of Approval
1 Palestine Palestine Investment Fund 30 06/03/2014
2 Republic of Djibouti Economic Development Fund of Djibouti (Second Loan) 20 06/03/2014
3 Kingdom of Bahrain Bahrain Development Bank(Second Loan) 50 22/06/2014
4 Sultanate of Oman Government of Oman 50 22/06/2014
5 Republic of Tunisia Government of Tunisia 50 22/06/2014
6 Arab Republic of Egypt National Bank of Egypt 50 25/12/2014
7 Palestine Palestine for Credit and Development(Second Loan) 10 25/12/2014
Total 260
In order to expand the scope of its activities and increase the effectiveness of its interventions to support the development of small and medium enterprises in Arab countries to provide employment opportunities and contribute to the reduction of poverty, the Special Account has expanded its cooperation with entities that have experience in institutional and legislative support to small and medium enterprises.
Annual Report 2014 29
Study of Sudan Project to Achieve Food Security 3. for the Arab World
The Arab Fund allocated a grant to conduct a study aimed at achieving food security for the Arab countries through the Sudan project. The study comprises the four following tasks: Task I involves the estimation of the food gap in the Arab countries, for five major crops, up to the year 2030. Task II involves assessing the capabilities and resources available in Sudan that could help reduce this food gap. Task III involves the construction of a mathematical model to determine the best utilization of water, land and labor resources, available in Sudan, for producing products that could be exported to the Arab countries, at competitive prices. Task IV involves the development of a sectoral plan, based on the projects identified in Task III of the study.
Task I of the study was completed in mid-2014. It identified the food gap in wheat, sugar, oils, meat and dairy in the Arab countries throughout the period 2013 – 2030. Task II of the study was completed at the end of the third quarter of the same year. It identified the crops to be grown in Sudan, and exported to the Arab countries, at competitive prices, to reduce part of the food gap. It is expected that the entire study will be completed by the end of the first quarter of 2015.
Study of Pan-Arab Interconnection and4. Utilization of Natural Gas
The cost of generating electricity varies significantly from one Arab country to the other, mainly due to the availability of abundant quantities of natural gas in some countries, and lack thereof in others, thus creating good opportunities for energy trade. To capitalize on this situation and make better use of the electrical interconnections that have been constructed, and in an effort to develop an integrated master plan for upgrading the generation and transmission systems in the Arab countries, the Arab Fund allocated a grant to finance a study to determine the optimum plan for every Arab country, and for all Arab countries combined, to attain the best tradeoff between exporting natural gas and exporting electricity.
The draft final report of the study was completed in the fourth quarter of 2013. Its main result included the development of an integrated strategy for the expansion of the electrical interconnections and gas pipelines between the Arab countries for the period 2012 – 2030, in order to attain the lowest total cost of generation during that period. The study recommended that the Arab countries implement seven new electrical interconnection projects, two gas pipelines and an LNG reception terminal.
The report estimated that the implementation of the recommended projects would lead to the reduction of the total cost of generation for the Arab countries, during the period 2012 – 2030, by around US Dollars 127 billion, of which US Dollars 7 billion as savings in capital costs and US Dollars 120 billion as savings in operating costs.
In addition to recommending future electricity and gas projects, the consultant constructed an integrated mathematical model to determine the most appropriate price for energy exchange between the Arab countries, in order to provide equitable compensation for the countries that will suffer losses due to energy flowing in their networks as a result of energy being exchanged between their neighboring countries.
30 Annual Report 2014
A meeting was held at the Arab Fund headquarters, in January 2014, to present the outcome of the study. During the meeting, which was attended by representatives of the countries that participated in the study, the consultant presented the results and recommendations of the study and received comments on the draft final report. The consultant issued the final report of the study in April 2014, which took into consideration all comments received. A copy of this report was sent to each participating country.
Arab Spring5. Development Initiative (ASDI)
ASDI aims at contributing to the ongoing political and economic transformation in the Arab region, with a view to promote shared prosperity in a context of good governance and enhanced access to knowledge and data, towards meeting the challenges of transition. ASDI builds on a successful partnership that was formed during the period 2009 – 2013 between the World Bank and the Arab Fund for a “Research Initiative for Arab Development” (RIAD), which was agreed on the ground of matching contributions and carried out by the Economic Research Forum (ERF). Likewise, ASDI is being implemented by ERF in partnership with both the World Bank and the Arab Fund. The ERF governance structure will oversee the implementation of the Initiative. In addition, a Scientific Committee (SC) and a Donors’ Committee (DC) were set up to follow up the implementation of the Initiative.
ASDI will focus on three main areas of activity:Open Access Data:1. This new platform parallels the successful World Bank initiative on making data available to researchers and policymakers alike. The main distinction between the two initiatives is that ERF will focus on the Arab countries, where micro data are generally not available or inaccessible. This is a large undertaking that responds directly to the Arab Spring demand for more transparency and accountability.
Knowledge Creation:2. The emphasis in this area will be on four themes that are of critical importance to the region at this juncture in its development, namely: (i) The Economics and Politics of Arab Awakening, (ii) Inequality, (iii) Employment, and (iv) Natural Resources and Economic Diversification. Work in these areas is aimed at bridging the knowledge gap in the countries of the region to identify policy choices and improve policy design.
Policy 3. Dialogue: Systematic effort will be made to create a variety of platforms for policy discussions, by varying topics and stakeholders including researchers and policy makers as well as tools and formats to maximize impact. In particular, channels of communication using new social media and internet tools will be adopted.
6. Arab Development Portal
Recognizing the importance of having accurate and timely information for making informed decisions, the heads of the national and regional institutions that constitute the Coordination Group (CG) agreed to jointly finance an ambitious program to develop the Arab Development Portal (ADP).
Annual Report 2014 31
ADP is a knowledge platform and community of practice, which supports knowledge flows and collaboration through real time partnerships, learning opportunities and sharing of best practices, document and data retrieval and manipulation, blogs, discussion spaces, user memberships and on-line community development.
Due to the size of the undertaking, the CG members decided to implement the project in three phases. Phase I was limited to 5 economic themes in two Arab countries, and was to serve as a pilot project, with the aim of achieving proof of concept and receipt of feedback from the users on the usefulness of the portal and how the design/interface could be improved. In Phase II, the number of countries was increased to include all Arab countries, and the database was expanded by an additional 4 economic themes. In this phase, the United Nations Development Program (UNDP) is expected to recommend the final design of the portal, and estimate the cost of operating and maintaining it upon its completion, prior to having one of the CG members host the portal and continue to update and expand its content.
It is worth noting that the OPEC Fund for International Development (OFID), on behalf of the CG members, signed contracts, totaling around US Dollars 2 Million, with UNDP and the World Bank for the development of Phases I and II. The development of Phase I was completed in March 2014, and it is expected that the development of Phase II will be completed by mid-2015. Once all three phases are finished, it is envisioned that ADP will serve as a reference point for all economic, labor, regulatory, educational, health and infrastructure information in the Arab world.
7. Enhancing Food Security in Arab Countries
The Arab Fund contributed to the project on Enhancing Food Security in Arab Countries, in cooperation and coordination with the International Center for Agricultural Research in Dry Areas (ICARDA) and a number of Arab financial institutions. This project aims at developing the capabilities of national agricultural research centers and farmers in 10 Arab countries, namely Egypt, Sudan, Morocco, Tunisia, Jordan, Yemen, Syria, Palestine, Iraq and Algeria, to adopt and use modern technologies to achieve a sustainable increase in grain production, including the development of methodologies and ways to transfer technology and disseminate it among farmers on a wide scale. The project also aims at establishing effective partnerships between national and international agricultural research centers in grain and wheat, in order to develop modern irrigation systems for the production of grain, integrated management of production and prevention, transfer these technologies to farmers, and improve the technology packages to suit the local environment and agricultural systems in Arab countries. This project falls within the framework of the priorities set forth by the Arab Economic and Developmental and Social Summit, held in Kuwait in 2009, which emphasized the necessity to enhance Arab food security as it is considered one of the pillars of Arab national security.
With the aim of increasing cooperation between national agricultural research centers in Arab countries and ICARDA, and attracting the required financing to expand the activities of the project, in order to continue to implement the technologies and research, and widen circulation and publication of its results among the targeted segments to achieve
32 Annual Report 2014
tangible increases in agricultural production, specifically wheat, the Arab Fund hosted at its headquarters during the period 11 – 12 November, 2014, a joint ministerial meeting for Arab countries and ICARDA on food security in Arab countries. The meeting was attended by Arab agriculture ministers and Arab national and regional financial institutions. At the conclusion of the meeting, a declaration was issued confirming the Arab countries’ continued interest and support to execute the future phases of the project, expand the implementation of its outcomes to other areas in every Arab country within its strategy to enhance food security, establish an information network to exchange experience and knowledge on ways to enhance food security, and invite Arab financial institutions to contribute to this project.
8. Third Arab Development Symposium: “Reforming the Education System in the Arab World with the View of Enhancing Employability of Outcomes”
The Symposium was the third in the series of Arab Development Symposia co-organized by the Arab Fund and the World Bank for the purpose of addressing pressing developmental issues in Arab countries. The Symposium was held on November 5, 2014, at the Arab Fund headquarters, and aimed at providing an overview of the status of the employability of the educational sector graduates in Arab countries. More specifically, the Symposium identified the main constraints hindering the improvement of the employability of educational outcomes, and underlined both general public policies and reforms capable of overcoming these constraints and improving quality and governance within educational institutions.
The Symposium focused on four areas: i) determining whether the Arab education systems serve as barriers or enhancers of employability; ii) improving the links between education and the labor market by looking at the role of public policy at the macroeconomic level; iii) strengthening the role of governance and accountability in improving the quality of education and employability at the microeconomic level, and iv) overviewing international, regional and national experiences and delineating best practices.
The Symposium was attended by a selected group of international experts, officials from international and regional organizations, and specialists and decision makers from within and outside the Arab region.
9. Tenth Arab Energy Conference
The Arab Fund, in cooperation with the Organization of Arab Petroleum Exporting Countries (OAPEC), organized and shared the expenses of the Tenth Arab Energy Conference, which was held in Abu Dhabi, U.A.E., during the period 21 – 23 December 2014.
The Conference addressed various energy issues in the Arab world, including the latest drilling and refining technologies, the future prospects of the energy sector and the main challenges facing it, the future of renewable energy in the Arab world, techniques for energy conservation in power plants and industry, along with the various means of cooperation between Arab countries in the areas of electricity and natural gas.
Annual Report 2014 33
The Arab Fund prepared and presented to the Conference a paper summarizing the results of the recent study that it financed and supervised, which aimed at determining the feasibility of Pan Arab electrical interconnection and the utilization of natural gas for the export of electricity. The presentation covered the objectives of the study, its components, and its main results and recommendations.
10. Preparation of the Joint Arab Economic Report
The Arab Fund annually participates in the preparation of the Joint Arab Economic Report, in cooperation with the General Secretariat of the League of Arab States, the Arab Monetary Fund and the Organization of the Arab Petroleum Exporting Countries. The Arab Fund contributes to the report with the chapters on economic and social development, the agriculture and water sector, the industrial sector, and Arab developmental aid. The Arab Fund also prepares, on a rotating basis with the Arab Monetary Fund, the chapter that addresses the theme of the report. The theme of this year’s report was “Reforming the Energy Support System in Arab Countries”.
11. Various Activities
The Arab Fund continued to monitor the activities of the Arab Trade Financing Program in coordination with the Arab Monetary Fund, and through its membership on the Board of Directors of the Program. It also continued its cooperation with specialized Arab and international organizations in order to help improve the efficiency of their interventions in Arab countries.
34 Annual Report 2014
Fourth: Financial Statements for the Financial YearEnded 31 December 2014
I. Financial Position Assets:The value of Arab Fund Assets increased in 2014 by KD 234 million (8%) compared to 2013 reaching KD 3,207 million, this increase was mainly in Loans as shown in the below schedule:
Variation20132014Assets KD
Million% KD
Million% KD
Million
(10)1%411%31Cash & Cash Equivalents
5611%33512%391Investments
19587% 2,56286% 2,757Loans
(7)1%351%28Others Assets
234100% 2,973100% 3,207Total
8%
Liabilities:The value of Liabilities increased in 2014 by KD 6.9 million (5%) compared to 2013 reaching KD 155 million, this increase was mainly in Special Account for Financing Small and Medium Enterprises as shown in the below schedule:
Variation20132014Liabilities KD
Million% KD
Million% KD
Million
9.847%69.651%79.4Special Account for Financing Small and Medium Enterprises
3.421%30.922%34.3Grants
0.98%11.98%12.8Provision for Pension Fund
(7.2)24%35.719%28.5Other Liabilities
6.9100%148.1100%155.0Total
5%
Members’ Equity:The value of Members’ Equity increased in 2014 by KD 227 million (8%) compared to 2013 reaching KD 3,052 million, this increase was mainly from reserves as shown in the below schedule:
Annual Report 2014 35
Variation20132014Members’ Equity KD
Million% KD
Million% KD
Million
5588% 2,500 84% 2,555 Share Capital
99%2468%255General Reserve
1583%768%234Additional Reserve *
50%30%8Other Reserves
227100% 2,825 100% 3,052 Total
8%
II. Income & ExpendituresIncome:Total Income for the year amounted to KD 92.7 million compared to KD 87.1 million in 2013, with an increase of 6% reaching KD 5.6 million. This increase was mainly from Interest Income from Loans as shown in the below schedule:
Variation20132014Income KD
Million% KD
Million% KD
Million
5.577%67.278%72.7Interest Income from Loans
(3.7)24%21.219%17.5Gain from Investments
3.8 (1) %(1.2)3%2.6Income of Arab Trade Finance Program
0.00%(0.1)0%(0.1)Other operating (Loss)
5.6100%87.1100%92.7Total
6%
Expenditures:Total Administrative Expenses for the year amounted to KD 8.3 million compared to KD 8.1 million in 2013, this increase KD 0.2 million (2%) was a result of Other Expenses as shown in the below schedule:
Variation20132014Expenditures KD
Million% KD
Million% KD
Million
0.177%6.276%6.3Staff Cost
0.123%1.924%2.0Other Expenses
0.2100%8.1100%8.3Total
2%
* The general provision of loans which amounted to KD 96.8 million is transferred to the additional reserve.
36 Annual Report 2014
Net Profit:
Net profit for the year amounted to KD 84.4 million compared to KD 33.5 million in 2013, this
increase KD 50.9 million (152%) was a result of an increase in Income and discontinued
method of calculation of Loans’ Provision as shown in the below schedule:
Variation20132014Net Profit KD
Million% KD
Million% KD
Million
5.379.184.4Net Profit before Provision
45.6(45.6)0Loans’ Provision
50.933.584.4Net Profit of the Year
152%
III. Cash Flows
Shown below is a schedule summarizing the main Cash Flows:
KD MillionCash Flows
20132014
(32.4)(104.6)Net change in trading investments
(251.5)(257.8)Disbursements of loans
158.4159.1Loans Repayments
(10.1)(8.0)Disbursements of grants
80.179.2Interest received
0.054.9Paid up Capital
IV. Financial Indicators of Arab Fund Performance
20132014Financial Ratios
%%
1.1%2.6%Net Income/ Assets
1.2%2.8%Net Income/ Members’ Equity
9.3%9.0%Expenditures/ Revenues
86.2%86.0%Loans/ Assets
90.7%90.3%Loans/ Members’ Equity
Annual Report 2014 37
Arab Fund for Economic and Social DevelopmentStatement of Financial Position
As at 31 December 2014 (KD 000)
2014 2013
Assets
Cash and cash equivalents 31,344 41,174
Investments 317,194 286,129
Investment in associate 73,233 49,214
Loans 2,756,985 2,561,474
Receivables from participants in the building 6,677 7,023
Other assets 21,321 27,842
Total assets 3,206,754 2,972,856
Liabilities and members’ equity
Liabilities
Special account for financing small and medium enterprises 79,412 69,546
Grants 34,299 30,902
Provision for pension fund 12,812 11,946
Other liabilities 28,475 35,674
Total liabilities 154,998 148,068
Members’ equity
Share capital 2,554,909 2,500,000
General reserve 254,650 246,207
Additional reserve 233,781 76,389
Grants reserve 4,296 3,752
Change in the fair value reserve 4,120 (1,560)
Total members’ equity 3,051,756 2,824,788
Total liabilities and members’ equity 3,206,754 2,972,856
38 Annual Report 2014
Arab Fund for Economic and Social DevelopmentStatement of Comprehensive IncomeFor the year ended 31 December 2014
(KD 000)
2014 2013
Income
Interest income from loans 72,730 67,229
Net investments gain 17,384 21,193
Interest income from time deposits and call accounts 66 38
Gain/ (Loss) from an associate 2,625 (1,268)
Operating expenses (51) (46)
Net income 92,754 87,146
Administrative expenses
Staff costs 6,326 6,137
Other expenses 2,001 1,925
8,327 8,062
Net Income before provision for loans 84,427 79,084
Provision for loans 0 (45,571)
Net profit for the year 84,427 33,513
Other comprehensive income
Net change in fair value of investments available for sale 5,680 580
Other comprehensive income for the year 5,680 580
Total comprehensive income for the year 90,107 34,093
Annual Report 2014 39
Arab Fund for Economic and Social DevelopmentStatement of Changes in Members’ Equity
For the year ended 31 December 2014 (KD 000)
ShareCapital
General Reserve
Additional Reserve
Grants Reserve
Change in Fair Value
Reserve
Retained Earnings Total
Balance as at 1 January 2014 2,500,000 246,207 76,389 3,752 (1,560) 0 2,824,788
Profit for the year 0 0 0 0 0 84,427 84,427
Other comprehensive income for the year 0 0 0 0 5,680 0 5,680
Total comprehensive income for the year 0 0 0 0 5,680 84,427 90,107
Share Capital paid 54,909 0 0 0 0 0 54,909
Transferred from general loans provision 0 0 96,803 0 0 0 96,803
Transfer to support people of Palestine 0 0 (3,351) 0 0 0 (3,351)
Transfer to Arab Academic Fellowship 0 0 0 0 0 (135) (135)
Transfer to grants reserve 0 0 (7,688) 11,909 0 (4,221) 0
Transfer to general reserve 0 8,443 0 0 0 (8,443) 0
Transfer to additional reserve 0 0 71,628 0 0 (71,628) 0
As at 31 December 2014 2,554,909 254,650 233,781 4,296 4,120 0 3,051,756
Balance as at 1 January 2013 2,000,000 242,856 561,275 6,641 (2,140) 0 2,808,632
Profit for the year 0 0 0 0 0 33,513 33,513
Other comprehensive income for the year 0 0 0 0 580 0 580
Total comprehensive income for the year 0 0 0 0 580 33,513 34,093
Transferred to Capital 500,000 0 (500,000) 0 0 0 0
Transfer to support people of Palestine 0 0 (10,362) 0 0 0 (10,362)
Transfer to Arab Academic Fellowship 0 0 0 0 0 (168) (168)
Transfer to grants reserve 0 0 (2,842) 4,518 0 (1,676) 0
Transfer to general reserve 0 3,351 0 0 0 (3,351) 0
Transfer to additional reserve 0 0 28,318 0 0 (28,318) 0
Grants approved 0 0 0 (7,412) 0 0 (7,412)
Grants cancelled and transferred 0 0 0 5 0 0 5
As at 31 December 2013 2,500,000 246,207 76,389 3,752 (1,560) 0 2,824,788
40 Annual Report 2014
Arab Fund for Economic and Social DevelopmentStatement of Cash flows
For the year ended 31 December 2014 (KD 000)
2014 2013
Operating Activities
Profit for the year 84,427 33,513
Adjustments:
Interest income from loans (72,730) (67,229)
Unrealized gains on investments (5,543) (11,068)
Interest income from time deposits and call accounts (66) (38)
Share in results from an associate (2,625) 1,268
Provision for Loans 0 45,571
Provision for pension fund 1,701 1,625
5,164 3,642
Changes in operating assets and liabilities
Net change in trading investments (104,619) (32,417)
Disbursements of loans (257,848) (251,463)
Loan’s repayments 159,140 158,375
Disbursements of grants (7,968) (10,049)
Receivables from participants in the building 346 346
Other assets 67 (84)
Special Account for Financing Small and Medium Enterprises 9,866 19,854
Other liabilities (10,550) (14,793)
Cash flows used in operations (206,402) (126,589)
Interests received 79,250 80,057
Pensions and employees’ end of service indemnity paid (835) (959)
Net cash flows used in operating activities (127,987) (47,491)
Investing activities
Net changes in other investments 63,248 48,410
Net cash flows from investing activities 63,248 48,410
Cash flows from financing activities
Capital paid 54,909 0
Net cash flows from financing activities 54,909 0
Net (decrease)/increase in cash and cash equivalents (9,830) 919
Cash and cash equivalents at beginning of the year 41,174 40,255
Cash and cash equivalents at end of the year 31,344 41,174
Annual Report 2014 41
Arab Fund for Economic and Social DevelopmentIndependent Arab Regional Financial Organization - Kuwait
Significant Accounting Policies
a) Statement of complianceThe financial statements of the Fund are prepared in accordance with accounting policies set out below and the establishment convention of the Fund.
b) Basis of measurementThe financial statements are prepared on a fair value basis for financial assets and liabilities held for trading and assets available for sale, except those for which a reliable measure of fair value is not available. Other financial assets and liabilities and non-financial assets and liabilities are carried at amortized cost or historical cost.
The accounting policies followed by the Fund are agreeing accordingly with the same policies followed in the previous year, except in discounting loan provision for impairment.
c) Investments Financial assets and liabilities are classified at fair value through profit or loss when the assets or liabilities are managed, evaluated and reported on a fair value basis.
Financial instruments are measured initially through profit or loss at fair value. Transaction cost on financial instruments expensed through profit or loss immediately. Subsequent to initial recognition, all instruments measured at fair value through profit or loss are re-measured at fair value with changes in their fair value recognized in the profit or loss.
Investments which are not held to maturity or financial assets at fair value through profit or loss are classified as available for sale and are stated at fair value, with any resultant gain or loss being recognized directly in equity, except for impairment losses and, in case of monetary items, foreign exchange gains and losses.
d) LoansThe Fund management reevaluated the accounting policy related to loans. According to the followed policy, loans were listed at amortized cost minus the provision for impairment, where the value of the provision for impairment is estimated when the loans are not expected to be paid in full. This provision is listed in the statement of comprehensive income. According to the current accounting policy, the loans are listed at its amortized cost without any provision for impairment, as it is considered as a guaranteed sovereign loans from the successive governments of member countries.
e) ImpairmentAn assessment is made by the Fund at each reporting date for loans, other assets, available for sale investments and investment in associate ,to determine whether
42 Annual Report 2014
there is objective evidence that a financial asset or group of financial assets is impaired. All impairment losses are recognized in the profit or loss.
f) Investment in associate The investment in the associated entity is equity accounted.
g) Fixed assetsFixed assets are not capitalized but are fully written off to the statement of comprehensive income in the year of purchase.
h) Provision for pension fund Provision for the Fund’s obligation towards employees’ pension is determined based on contributions paid by the employees’ and the Arab Fund, in addition to a return of 10% p.a. guaranteed by the Arab Fund.
i) Foreign CurrenciesTransactions in foreign currencies are initially recorded by the Fund at their respective functional currency spot rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. Differences from adjustment of the monetary items are recognized in profit or loss.
j) Cash and cash equivalentsCash comprises of cash on hand and in banks, cash equivalents comprise bank balances and short term deposits.
k) Revenue recognitionInterest income is recorded in profit and loss when earned, using the effective interest rate (EIR). Interest and commission on loans to countries with unpaid past due interest for over three months are excluded from the profit and loss and only recorded as income when received. Interest income from time deposits is recognized on a time proportion basis. Dividend income is recognized when the right to receive payment is established. Fees and commission income is recognized when earned.
Annual Report 2014 43
ANNEXES
44 Annual Report 2014
Annual Report 2014 45
Annex 1
Project Sheets for Loans Extended During the Year 2014
46 Annual Report 2014
Republic of Djibouti
Social Housing - Phase II (Supplementary Loan)
Loan No.: 607 Interest Rate: 2.5%
Beneficiary:Djibouti Real Estate Company and Ministry of Housing, Urban Planning, and Environment
Grace Period: 5 years
Project Cost: KD 7.44 million Maturity: 25 years Amount of Loan: KD 1.0 million Repayment: 41 semi-annual
installments Date of Loan Agreement: 09/03/2014 First
Installment:
5 years followingthe first disbursement Date of
Effectiveness:
Objectives:
The project aims at meeting the increasing demand for housing units for citizens in the lower income category, in order to improve their living conditions. The project represents the second phase of a plan to build about three thousand housing units in the Balbala area.
Description:
The project includes the construction of approximately 700 housing units in Djibouti City, and the provision of basic services. The project includes the following main components:
Land1. Expropriation and Basic Services: This includes primary leveling, paving of main roads, and provision of basic services through the extension of the main water and electricity lines to the site.
Construction of Houses:2. This includes the construction of approximately 700 housing units, with the build up area of each unit ranging between 70 m2 and 90 m2. It also includes the installation of water, electrical and sewage networks.
Sewage Utilities:3. This includes the installation of the main wastewater collector, and the construction of two pumping stations.
Consultancy Services:4. This includes the preparation of the design and tender documents, and the supervision of project implementation.
ANNEx 1PROJECT 1 OF 13
Annual Report 2014 47
Financing:
The two Arab Fund’s loans, loan No. 456/2003 and the supplementary loan, cover about 94% of the total project cost. The Government of Djibouti will cover the remaining cost of the project and any additional cost that may arise.
ANNEx 1PROJECT 1 OF 13
48 Annual Report 2014
Arab Republic of Egypt Electrical Interconnection Between
the Arab Republic of Egypt and the Kingdom of Saudi Arabia
Loan No.: 603 Interest Rate: 3.0%
Beneficiary: Egyptian Electricity Transmission Company Grace Period: 4 years
Project Cost: KD 177.7 million Maturity: 25 yearsAmount of Loan: KD 45.0 million Repayment: 43 semi-annual
installmentsDate of Loan Agreement: 24/03/2014 First
Installment:4 years following the first disbursementDate of
Effectiveness: 02/10/2014
Objectives:
The project aims at interconnecting the Egyptian electric power grid to the Saudi electric power grid using a 500 KV bipolar high voltage direct current interconnection, approximately 1,320 km long, and having a transmission capacity of 3,000 MW. This will lead to the interconnection of the two largest power grids in the Arab world with a total capacity exceeding 90 thousand MW, and will thus complete the interconnection between the Gulf Cooperation Council countries, the eight eastern Arab countries and the COMELEC countries.
Description:
The project, which is expected to be completed by the end of 2016, consists of constructing three 500 kV AC/DC conversion stations, aerial power lines and an undersea cable, the supply and installation of transformers, circuit breakers, measurement and control system and accessories, in addition to consultancy services and insurance. The project includes the following main components:
Part of the Project within 1. the Arab Republic of Egypt:
Conversiona. Station: This includes the construction of a 3,000 MW, 500 kV bipolar AC/DC conversion station and its accessories. This also includes the construction of a transition station from the undersea cable to the aerial line, and its accessories, on the west shore of the Gulf of Aqaba.
Aerial Power Lines:b. This includes the supply and installation of 500 kV bipolar DC aerial power lines, approximately 454 km long.
Consultancy Services:c. This includes technical and consultancy services to assist in bids evaluation, contract negotiations, project supervision, participation in factory tests and supervision of project commissioning.
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Part of the Project within 2. the Kingdom of Saudi Arabia:
Conversion Station:a. This includes the construction of two 500 kV bipolar AC/DC conversion stations in East Medinah and Tabuk rated at 3,000 MW and 1,500 MW respectively, and their accessories. This also includes the construction of a station for the transition from the undersea cable to the aerial line, and its accessories, on the east shore of the Gulf of Aqaba.
Aerial Powerb. Lines: This includes the supply and installation of 500 kV bipolar DC aerial power lines, approximately 850 km long.
Consultancy Services: c. This includes technical and consultancy services for this part of the project.
Common Part of the Project 3. in the Gulf of Aqaba:
Undersea Cable:a. This includes the supply and installation of a 500 kV bipolar DC undersea cable, approximately 16 km long.
Consultancy Services:b. This includes technical and consultancy services to assist in bids evaluation, contract negotiations, project supervision, participation in factory tests and supervision of project commissioning.
Financing:
The Arab Fund’s loan covers about 25% of the total project cost. European financial institutions contribute to the project with a loan equivalent to about KD 78.6 million (about 44%), the World Bank with a loan equivalent to about KD 34.2 million (about 19%), and the African Development Bank with a loan equivalent to about KD 12.2 million (about 7%). The beneficiary and the Egyptian Government will cover the remaining cost of the project and any additional cost that may arise.
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Arab Republic of EgyptAssiut Power Generating Station
(El-Walidia) 650 MW
Loan No.: 604 Interest Rate: 3.0%
Beneficiary: Upper Egypt Electricity Production Company Grace Period: 6 years
Project Cost: KD 192.6 million Maturity: 25 yearsAmount of Loan: KD 55.0 million Repayment: 39 semi-annual
instalmentsDate of Loan Agreement: 24/03/2014 First
Installment:6 years following the first disbursementDate of
Effectiveness: 28/08/2014
Objectives:
The project aims at satisfying the increasing demand for electric power and energy, by raising the installed power generation capacity of the Egyptian network by 650 MW. This will be accomplished by constructing a steam power generating station in the city of Assiut that runs on heavy fuel oil as the primary fuel.
Description:
The project, which is expected to be completed in the last quarter of 2018, comprises a 650 MW sub-critical steam generating unit consisting of a boiler, a turbine, a power generator, a condenser, and accessories. The project consists of the following main components:
Boiler and Accessories:1. This includes the design, supply and installation of a boiler and its accessories, in addition to the commissioning and supply of burner management systems, and other necessary works.
Steam Turbine, Power Generator, Condenser and Accessories:2. This includes the design, manufacture, supply and installation of a steam turbine, a power generator, a condenser and accessories.
Pumps and 3. Accessories: This includes the design, manufacture, and supply of main pumps, start-up pumps, condensate pumps and other pumps, in addition to the installation supervision, and commissioning.
Feed Water Heaters4. : This includes the design, manufacture, supply and installation of feed water heaters, and installation supervision and commissioning.
Water Treatment 5. and Environmental Pollution Monitoring: This includes the supply and installation of water treatment systems and environmental pollution monitoring equipment.
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Transformers6. and Circuit Breakers: This includes the design and supply of the main 850 MVA power transformer, the interconnection transformer 500/220 kV and auxiliary transformers. This also includes the supply and installation of the switchyard.
Critical Pipes and Valves:7. This includes the manufacture and supply of critical pipes, valves, heat sensors, thermocouples, flow meters and accessories, and the installation supervision and commissioning.
Mechanical and Electrical Works:8. This includes the supply and installation of fire fighting systems, air compressors and other mechanical equipment, and critical pipes. The electrical works include the supply and installation of battery systems and distribution boards, in addition to the installation of transformers, medium voltage breakers, DCS and other electrical equipment.
Measurement and Control Systems:9. This includes the supply of measurement and control systems and accessories, and the installation supervision and commissioning.
Civil Works and Tanks10. Yard: This includes civil works, and construction of roads, buildings and tanks.
Consultancy Services and Insurance:11. This includes technical and consultancy services required for the project design and environmental impact study, preparation of tender documents, and other technical, advisory and supervisory services, in addition to project insurance.
Financing:
The Arab Fund’s loan covers about 29% of the total project cost. It is expected that the Saudi Fund for Development will contribute to the financing of the project with a loan equivalent to about KD 8.5 million (about 4%), the Kuwait Fund for Arab Economic Development with a loan of about KD 30 million (about 16%), the OPEC Fund for International Development with a loan equivalent to about KD 15.5 million (about 8%) and the Islamic Development Bank with a loan equivalent to about KD 62.8 million (about 32%). The beneficiary and the Egyptian Government will cover the remaining cost of the project and any additional cost that may arise.
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Sultanate of OmanInfrastructure Facilities for Sumail Industrial Estate
Loan No.: 576 Interest Rate: 3.0%
Beneficiary: Public Establishment for Industrial Estates Grace Period: 4 years
Project Cost: KD 19.2 million Maturity: 20 yearsAmount of Loan: KD 14.0 million Repayment: 33 semi-annual
installmentsDate of Loan Agreement: 08/04/2014 First
Installment:4 years following the first disbursementDate of
Effectiveness:
Objectives:
The project aims at developing the industrial sector in the Sultanate of Oman in order to create new jobs, particulary for the youth. This will be achieved through the construction of a new industrial estate at Sumail area that includes all the infrastructure facilities needed to enable investors to build new industries.
Description:
The project, which is expected to be completed by the end of 2016, consists of the followingmain components:
Civil Works:1. These include construction of buildings, water reservoirs, water networks for drinking, industrial use and for fire fighting, wastewater networks and treatment plants, rainfall drainage canals, irrigation networks, main and secondary roads, parking areas and all other civil works needed for the project.
Technical Services:2. These include preparing studies, final detailed design, tender documents, and construction supervision. In addition, technical services include hiring of local and foreign experts.
Institutional Support:3. This includes procurement of equipment and tools needed to operate and maintain the different facilities, in addition to conducting training programs for the local staff, and carrying out a program to raise the awareness of industries on safety and environmental protection.
Financing:
The Arab Fund’s loan covers about 73% of the total project cost. The Public Establishment for Industrial Estates will cover the remaining cost of the project and any additional cost that may arise.
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Sultanate of OmanHousing Program
Loan No.: 605 Interest Rate: 3.0%
Beneficiary: Oman Housing Bank (S.A.O.C) Grace Period: 4 years
Project Cost: KD 50.0 million Maturity: 22 years Amount of Loan: KD 40.0 million Repayment: 37 semi-annual
installments Date of Loan Agreement: 08/04/2014 First
Installment:4 years following the first disbursementDate of
Effectiveness: 18/09/2014
Objectives:
The program aims at meeting the needs of qualified low and middle-income citizens for adequate housing, which will enable them to improve their living conditions and social situation. This will be accomplished through the provision of concessional loans to those citizens for the purchase or construction of housing units.
Description:
The program, which is expected to be completed during the second quarter of 2017, consists of the provision of concessional loans by the Oman Housing Bank to qualified low and middle-income citizens for the purchase or construction of housing units. The amount of each loan cannot exceed 90% of the value of the housing unit, or 60 thousand Omani Riyals, whichever is lower, and the loan repayment period cannot exceed 25 years.
Financing:
The Arab Fund’s loan covers about 80% of the total program cost. The Omani Government will cover the remaining cost of the program and any additional cost that may arise.
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Republic of YemenInfrastructure Development in Sana’a City
Loan No.: 606 Interest Rate: 2.5%
Beneficiary: Municipality of Sana’a Grace Period: 6 years
Project Cost: KD 37.1 million Maturity: 19 yearsAmount of Loan: KD 30.0 million Repayment: 39 semi-annual
installmentsDate of Loan Agreement: 08/04/2014 First
Installment:6 years following the first disbursementDate of
Effectiveness: 22/06/2014
Objectives:
The project aims at improving the efficiency of the main road network, minimizing traffic congestion, and protecting the population, buildings, shops and existing infrastructure from potential damage caused by the floods in different parts of the capital Sana’a. This will be accomplished through the construction of the necessary facilities for main road intersections and storm water drainage in the city of Sana’a.
Description:
The project, which is expected to be completed by the end of 2017, comprises two main parts, the first constitutes the fourth stage of the main road intersections while the second includes the works of flood protection in different parts of Sana’a. The project also includes the provision of technical services and institutional support. The project includes the following components:
Main Intersections 1. Works: This part includes all civil works required to construct bridges and tunnels at four intersections: 50th street with Shahran street, 60th street with Taiz street, 40th street with May 22nd street, and 60th street with Faj Attan street. It also includes the construction of a branch bridge at the intersection of 50th street with October 14th street, and three tunnels at the following intersections: 60th street with Al-Anab Valley street, 60th street with Al-Nahda street, and 60th street with Al-Rabat street, in addition to all necessary auxiliary works such as water drainage, electrical lighting, signals and traffic signs, as well as the extension and relocation of the utility networks affected by the works.
Flood Protection Works:2. This includes the extension of the main open channel for water drainage, known as Al-Saylah, located in the northern part of the city of Sana’a, with a length of about 9,500 m and a width ranging between 20 m and 24 m, and the
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construction of about 24 pedestrian bridges and two vehicle bridges. It also includes the installation of a main sewer line of about 4,000 m in length with a 1.5 m diameter, the landscaping works (sidewalks, planting, lighting, traffic signs and signals), and all other necessary auxiliary works related to the main channel and its branches, in addition to all services related to these works.
Technical Services:3. This includes the technical services required for the preparation of technical studies, the review and update of the design and tender documents, the analysis of bids and the supervision of the project. It also includes the acquisition of machinery and equipment required for the operation and maintenance of the facilities, and the implementation of a training program for local staff working in the areas of roads, bridges and flood protection in Sana’a.
Financing:
The Arab Fund’s loan covers about 81% of the total project cost. The Yemeni Government will cover the remaining cost of the project and any additional cost that may arise.
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Republic of TunisiaRegional and Rural Roads Network
(Phase III)
Loan No.: 608 Interest Rate: 3.0%
Beneficiary:Ministry of Equipment, Spatial Planning and Sustainable Development
Grace Period: 5 years
Project Cost: KD 53.7 million Maturity: 22 years Amount of Loan: KD 40.0 million Repayment: 35 semi-annual
installments Date of Loan Agreement: 08/04/2014 First
Installment:
5 years followingthe first disbursement Date of
Effectiveness: 10/09/2014
Objectives:
The project aims at improving land transportation in a number of Tunisian governorates, and linking agricultural production areas with markets and export facilities. This will be achieved through the construction and rehabilitation of a number of regional and rural roads. The Arab Fund has also financed the first two phases of the project.
Description:
The project, which is expected to be completed by the end of 2016, includes the construction and strengthening of several segments of the classified regional road network, and the construction and improvement of a large number of rural roads, in addition to technical services required for construction supervision and quality control. The project includes the following main components:
Development of the Regional Road Network:1. This includes the construction and strengthening of 7 segments distributed over 6 governorates. These segments have a total length of about 210 km, with an asphaltic width ranging between 7 m and 8 m, and shoulders on each side with a width ranging between 1.5 m and 2.75 m. It also includes water drainage structures and other ancillary works.
Construction of2. Rural Roads: This includes the construction and improvement of 117 rural roads, distributed over 22 governorates, with a total length of about 750 km, and overall width ranging between 8 m and 11 m. It also includes water drainage structures and other ancillary works.
Technical Services:3. This includes providing consultancy services to assist the Ministry in construction supervision and quality control of the works. It also includes the preparation of additional studies that may be required for the project execution, and any modifications of the project design.
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Financing:
The Arab Fund’s loan covers about 74% of the total project cost. The Tunisian Government will cover the remaining cost of the project and any additional cost that may arise.
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Republic of Lebanon
Housing Project
Loan No.: 585 Interest Rate: 3.0%
Beneficiary: Housing Bank Grace Period: 4 years
Project Cost: KD 42.5 million Maturity: 22 years Amount of Loan: KD 34.0 million Repayment: 37 semi-annual
installmentsDate of Loan Agreement: 11/05/2014 First
Installment:4 years following the first disbursementDate of
Effectiveness:
Objectives:
The project aims at contributing to the reduction in the severity of the housing crisis, and meeting the needs of low and middle-income citizens for adequate housing, which will enable them to improve their living conditions and social situation. This will be accomplished through the provision of concessional loans to those citizens for the purchase or construction of housing units.
Description:
The project, which is expected to be completed by the end of the second quarter of 2015,consists of the provision of concessional loans by the Housing Bank to low and middle- income citizens for the purchase or construction of housing units. The project includes the following main components:
Loans to Low-Income Citizens:1. This component includes the provision of loans by the Housing Bank to low-income citizens, that is those whose monthly family income does not exceed ten times the minimum monthly salary, for the purchase or construction of a housing unit. The amount of each loan cannot exceed 80% of the value of the housing unit, or 300 million Lebanese Pounds, whichever is lower, and the loan repayment period cannot exceed 20 years.
Loans to2. Middle-Income Citizens: This component includes the provision of loans by the Housing Bank to middle-income citizens, that is those whose monthly family income ranges between ten and fifteen times the minimum monthly salary, for the purchase or construction of a housing unit. The amount of each loan cannot exceed 80% of the value of the housing unit, or 450 million Lebanese Pounds, whichever is lower, and the loan repayment period cannot exceed 20 years.
Financing:
The Arab Fund’s loan covers about 80% of the total project cost. Beneficiaries from the housing loans will cover the remaining cost of the project and any additional cost that may arise.
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Republic of Lebanon
Completion of Wastewater Facilities in Lebanon
Loan No.: 600 Interest Rate: 3.0%
Beneficiary:Council for Development and Reconstruction
Grace Period: 5 years
Project Cost: KD 49.1 million Maturity: 22 years Amount of Loan: KD 30.0 million Repayment: 35 semi-annual
installments Date of Loan Agreement: 11/05/2014 First
Installment:
5 years followingthe first disbursement Date of
Effectiveness:
Objectives:
The project aims at meeting the increasing demand for wastewater services in the Abda – Akkar Basin, Central and Northern Bekaa and Echouf. The project also aims at controlling the arbitrary disposal of wastewater that flows from cesspits and open channels into streams, rivers and coastal waters, thus protecting sources of groundwater, surface water and beaches from pollution.
Description:
The project, which is expected to be completed by the end of 2018, includes the construction or completion of wastewater collection networks consisting of main, secondary, sub and side pipelines, as well as house connections and pumping stations which will serve to collect the wastewater from towns and villages within the project area and transfer it to the existing treatment plants or to the ones that will be constructed within this project to treat the wastewater before it is disposed of. The project also includes provision of the necessary consultancy services to update and complete studies on some sub projects, preparation of their engineering designs and tender documents, supervision of the project implementation, as well as preparation of any necessary additional studies required to fulfill the project’s objectives, and provision of institutional support to the Council. The project includes the following main components:
The Main Works (Networks and Stations):1.
Completion of the Sub Project in the Abda – Akkar Basin:a. The wastewater works required for the Abda – Akkar Basin were divided into three stages, that is, Coast 1, 2 and 3, which cover about 80 towns and villages. The sub project for this area is limited to the completion of the first stage (Coast 1) which will be partially financed through the Arab Fund’s loan No. 496/2006. This component consists of constructing the collection pipelines, the house connections and the main manholes, as well as diverting the primary treatment plant in Abda to the secondary treatment plant, and providing it with all the necessary equipment, with the possibility of expanding it in the future to meet the needs of the three stages.
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Sub Project in Central and Northern Bekaab. : This sub project serves several towns and villages of Central and Northern Bekaa which lie along the Litani River in the area confined between the north of Zahleh and the south of Baalbek. This sub project consists of the collection network, the house connections and a secondary treatment plant.
Completion of the Sub Project in the Coast of Echoufc. : This sub project consists of completing the wastewater networks which have been partially executed, by extending the sub and side pipelines, constructing the necessary pumping stations and house connections in order to transport the wastewater from the towns and villages of this area to the treatment plant.
The d. Sub Project in El Arkoob: This sub project serves an area which comprises a number of towns, and consists of the construction of a wastewater network comprising of main, secondary, sub and side pipelines, pumping stations and house connections, as well as a number of wastewater treatment plants with all their equipment.
Consultancy Services and Institutional Support2. : This component consists of updating and completing studies on some sub projects, preparing their designs and tender documents, supervising the project implementation, as well as preparing any necessary additional studies required to fulfill the project’s objectives. This component also includes the use of experts to assist the project unit in managing the implementation, and institutional support to the Council.
Land Expropriation:3. This component includes the acquisition of land required for the execution of the project.
Financing:
The Arab Fund’s loan covers about 61% of the total project cost. The Lebanese Government will cover the remaining cost of the project and any additional cost that may arise.
Annual Report 2014 61
Republic of Tunisia
Upper Mellegue Dam
Loan No.: 609 Interest Rate: 3.0%
Beneficiary: Ministry of Agriculture Grace Period: 6 years
Project Cost: KD 40.8 million Maturity: 22 years Amount of Loan: KD 30.0 million Repayment: 33 semi-annual
installments Date of Loan Agreement: 24/06/2014 First
Installment:
6 years followingthe first disbursement Date of
Effectiveness:
Objectives:
The project aims at improving the regulation of Wadi Mellegue water, one of the main tributaries of Wadi Medjerda, through the construction of the upper Mellegue dam and its appurtenant structures in El Kef province, in order to compensate for the decrease in the storage capacity of the existing Mellegue dam on Wadi Mellegue due to the accumulation of sediment in its reservoir. The dam will also contribute to the flood protection of the lands and buildings in both Wadi Mellegue and Wadi Medjerda basins, and to an increase in the quantities of regulated surface water resources in the northwestern region of Tunisia, through the storage of flood water which is currently wasted into the Mediterranean Sea. The water regulated through this project will allow for the intensification of agricultural production in the lands equipped for irrigation downstream of Upper Mellegue dam in the plains of Wadi Mellegue and Wadi Medjerda, and electricity generation from an associated small power station.
Description: The project, which is expected to be completed by the middle of the year 2020, consists of the construction of a dam on Wadi Mellegue and its appurtenant structures, which include a small hydroelectric power station, at a location approximately 16 km west of the city of El Kef, as well as the technical services necessary to implement the project. The project also includes the expropriation of land necessary to implement and operate the dam, in addition to project management. The project consists of the following main components:
Dam Construction:1. This includes the construction of a roller compacted concrete gravity dam and its appurtenant structures on Wadi Mellegue. The dam has a height of approximately 42 m above the Wadi bed (approximately 70 m above the foundation), a crest length of approximately 432 m and width of 7 m. It also includes a fill dyke with a height of approximately 4 m and a length of approximately 65 m to close
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a depression in the right bank of the Wadi, and a roller compacted concrete dyke with a height of approximately 35 m and a length of approximately 260 m to close a depression in the left bank of the Wadi. The dam’s appurtenant structures includes a main spillway above the dam with a discharge capacity of 8,600 m3/s, a secondary spillway in the right bank of the Wadi with a discharge capacity of 6,100 m3/s, a small hydroelectric power station with installed capacity of approximately 2 MW, in addition to a water intake and a bottom outlet. The dam impounds a reservoir with a storage capacity of approximately 195 million m3. This component also includes all the preparatory, civil, hydro mechanical and electrical works necessary to construct the dam and its appurtenant structures.
Technical 2. Services: This includes consultancy services necessary to review and complete the studies and designs, and the construction supervision of the project. It also includes, when required, the services of international experts to review the studies and designs, and provide technical advice during the implementation of the project.
Land Expropriation:3. This includes the land acquisition and compensation for properties required for the construction of the dam.
Project Management:4. This includes the establishment and management of the project management unit which will be responsible for the follow up and monitoring of the construction works.
Financing:
The Arab Fund’s loan covers about 74% of the total project cost. The Tunisian Government will cover the remaining cost of the project and any additional cost that may arise.
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The Islamic Republic of MauritaniaConstruction of a Solar Power Station in Nouakchott
and the Modernization of the Electrical System
Loan No.: 610 Interest Rate: 2.5 %
Beneficiary: SOMELEC Grace Period: 7 years
Project Cost: KD 47.6 million Maturity: 25 yearsAmount of Loan: KD 30.0 million Repayment: 37 semi-annual
installmentsDate of Loan Agreement: 24/06/2014 First
Installment:
7 years following the first disbursement Date of
Effectiveness:
Objectives:
The project aims at meeting the increasing demand for power and energy in the city of Nouakchott and its suburbs without using fossil fuel, controlling the electrical grid, and supplying small towns and villages in eastern Mauritania with electricity.
Description: The project, which is expected to be completed in the first quarter of 2017, includes the construction of a solar power generating station, a control center to supervise the operation of the electrical generation, transmission and distribution systems, a generation and distribution system for the eastern areas of Mauritania, and the provision of necessary consultancy services and institutional support. The project includes the following main components:
Solar Power Generating Station in Nouakchott1. : This includes the construction of a 30 MW solar power generating station east of Nouakchott, and its connection to the transmission network. The works include the supply and installation of solar panels, collectors of DC current, current inverters, step up transformers, circuit breakers and cables inside the station, the construction of a 33 kV line to connect the solar station to the eastern substation, along with the necessary civil works.
Network Control Center:2. This includes the construction of a center to control the existing and future power generating stations, the entire 225 kV and 33 kV transmission network, and a small portion of the 15 kV distribution network, in the city of Nouakchott.
Generation and Distribution System for 3. the Eastern Areas: This includes the supply and installation of two hybrid power generating stations in the cities of Al-
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Ne’ma and Adel-Bagrou, each made up of a thermal section and a solar section, and the construction of a 33 kV, 15 kV and 0.4 kV distribution system to supply small towns and villages located in five governorates in the eastern areas of Mauritania.
Consultancy Services:4. This includes providing consultancy services necessary to assist SOMELEC in the preparation of tender documents, contractual procedures, review of design drawings, project supervision, equipment witness testing and project acceptance.
Institutional Support5. : This includes training of SOMELEC employees, conducting studies, the acquisition, delivery and installation of computers, systems and printers, along with the acquisition of fault-finding equipment.
Financing:
The Arab Fund’s loan covers about 63% of the total project cost. It is expected that the OPEC Fund for International Development will contribute to the financing of the project with a loan for an amount equivalent to about KD 2.8 million (around 6%). The Mauritanian Government will cover the remaining cost of the project and any additional cost that may arise.
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Kingdom of MoroccoIrrigation of the Chtouka Aït Baha
Region with Desalinated Water
Loan No.: 611 Interest Rate: 3.0%
Beneficiary: Ministry of Agriculture and Fishery Grace Period: 5 years
Project Cost: KD 86.9 million Maturity: 22 yearsAmount of Loan: KD 50.0 million Repayment: 35 semi-annual
installmentsDate of Loan Agreement: 24/06/2014 First
Installment:
5 years following the first disbursement Date of
Effectiveness: 12/11/2014
Objectives:
The project aims at achieving the sustainable and safe use of the Chtouka underground water basin, preventing its depletion, preserving the irrigation facilities and agricultural equipment in the Chtouka Aït Baha region, and increasing the production of vegetables with high value added, through the desalination and distribution of sea water. The project will contribute to the development of agricultural exports, the protection of the environment, and the provision of new employment opportunities.
Description:
The project, which is expected to be completed by the end of the third quarter of 2019, includes the construction of a water desalination plant on the Atlantic Ocean, and a conveyance and distribution network of the desalinated water to the green houses in the Chtouka Aït Baha region. The project consists of the construction of a desalination plant, reservoirs, pumping stations, and the laying of pipelines, in addition to the supply of the desalination plant and pumping stations with electricity. The project also includes provision of the necessary technical services to prepare the studies and designs, assistance with tender documents and bid analysis, and construction supervision, as well as institutional support to the beneficiary and implementing agencies. The project consists of the following main components:
Desalination Plant and Facilities for 1. the Transport and Distribution of Irrigation Water:
Desalination Plant:a. This includes the construction of a desalination plant with a daily capacity of about 110 thousand m3. The plant includes two water intakes, two pipelines with a length of about 1,500 m and a diameter of about 1,600 mm
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each, a storage reservoir, and a pumping station with a capacity of about 1.6 m3 per second and a head of 125 m. It also includes all equipment for the reverse osmosis desalination plant, a reservoir for the desalinated water with a capacity of about 25 thousand m3, and a pipeline for the disposal of the brines into the sea with a length of about 3,600 m and a diameter of about 1,800 mm.
Facilities for the Transport and Distributionb. of Irrigation Water: This includes the construction of three stations to pump the desalinated water, with capacities ranging between about 1.0 and 2.4 m3 per second and a head ranging between about 112 and 125 m, and the laying of pipelines to transport and distribute the desalinated water, with a total length of about 305 km and diameters ranging between 160 and 1,100 mm.
Supply of Electricity:2. This includes the construction of 60 kV electric transmission lines with a total length of about 107 km, to supply the desalination plant and the pumping stations with electricity.
Technical Services:3. These include the provision of consultancy services for preparation of the project studies and assistance with tender documents and bid analysis, the construction supervision, as well as the preparation of any studies required to achieve the objectives of the project.
Institutional Support:4. This includes the acquisition of some necessary equipment to manage the project implementation, the training of employees of the beneficiary and implementing agencies, as well as the provision of guidance and awareness services to the farmers for their contribution to the financing of the project and the achievement of its objectives.
Financing:
The Arab Fund’s loan covers about 58% of the total project cost. It is expected that the farmers and a qualified private sector partner, who will construct and operate the project facilities, will contribute to the financing of the project for a total amount of about KD 9.6 million (about 11%). The Moroccan Government will cover the remaining cost of the project and any additional cost that may arise.
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Republic of Yemen
Al Ghaydah Central Hospital
Loan No.: 612 Interest Rate: 2.5%
Beneficiary: Ministry of Public Health and Population Grace Period: 5 years
Project Cost: KD 15.5 million Maturity: 25 yearsAmount of Loan: KD 6.0 million Repayment: 41 semi-annual
installmentsDate of Loan Agreement: 24/06/2014 First
Installment:
5 years following the first disbursement Date of
Effectiveness:
Objectives:
The project aims at improving health services in the governorate of Mahara, providing modern medical equipment, and supporting the training of local staff.
Description:
The project, which is expected to be completed by the end of 2017, includes the construction of a public hospital with a capacity of 130 beds in the city of Al Ghaydah, and housing for hospital employees. The project consists of the following main components:
Construction and Equipment1. : Buildingsa. for health services and housing of employees. Infrastructureb. works, including roads, parking lots, electricity, communication networks, water and wastewater networks, waste treatment, and all other auxiliary works.Equipmentc. , both medical and non-medical, and furniture.
Technical Services:2. These include the consultancy services needed to supervise the construction of the project, the use of expert services to help the project implementation unit, the training of local staff, and institutional support needed for the project management and operation.
Financing:
The Arab Fund’s loan covers about 40% of the total project cost. The Sultanate of Oman will provide a grant in an amount equivalent to about KD 7 million (around 46%). The Yemeni Government will cover the remaining cost of the project and any additional cost that may arise.
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Capital, Resources and Status of Loans and Grants 1972 - 2014
(KD Million)
Years Capital Total Resources Income Administrative
16 Rehabilitation of the Sugar Industry (Third Loan)*
181/86 3,400 - - 3,400 2,090
17 Rehabilitation of Gezira Agricultural Scheme (Third Loan)*
182/86 9,600 - - 9,600 7,056
18 National Power Grid* 198/87 8,500 - - 8,500 7,348 19 Port Sudan Water Supply* 206/87 10,000 5,000 - 5,000 3,040 20 Textiles Rehabilitation* 208/88 4,500 3,765 - 735 735 21 Paving of the Main Roads* 392/2000 23,000 - - 23,000 9,300 22 Roseires Dam* 393/2000 12,000 - - 12,000 4,875 23 Atbara - Haiya - Port Sudan Road* 410/2001 25,000 - - 25,000 6,075 24 Merowe Dam* 422/2002 46,000 - - 46,000 12,500
25 Generation and Transmission of Electricity from Merowe Dam*
448/2003 30,000 - - 30,000 4,994
26 Gadaref-Doka-Gallabat Road* 457/2003 9,000 130 - 8,870 1,833 27 Merowe Dam Road* 474/2005 4,000 - - 1,534 930 28 White Nile Sugar* 476/2005 21,000 - - 21,000 2,720 29 Heightening of Roseires Dam (Phase II)* 521/2007 58,000 - 2,662 56,869 -30 Merowe Dam (Supplementary Loan)* 528/2008 58,000 - 1,579 46,686 1,500 31 Al Salam Cement Factory (P)* 8P/2008 2,778 - - 2,778 2,77832 White Nile Sugar (Supplementary Loan) 548/2010 30,000 - 329 27,501 -33 Khartoum New International Airport 552/2010 50,000 - - - -34 Upper Atbara and Setit Dams Complex 557/2010 50,000 - 24,136 40,129 -
35 Electric Power Generating Station in the Upper Atbara and Setit Dams Complex
566/2011 30,000 - 4,507 9,378 -
36 East Sudan Roads 578/2012 54,000 - 885 12,059 -37 Water Harvesting in Border Provinces 582/2012 15,000 - 1,584 2,168 -38 Loan Program for Industrial Development Projects 586/2012 10,000 - - - -
Loans Extended to Beneficiary Member States 1974 - 2014
28 Southern Region Agricultural Development Project (Phase II)*
274/92 3,500 909 - 2,591 1,909
29 Tishrin Hydroelectric Dam* 279/93 36,000 3,054 - 32,946 24,576 30 Rehabilitation of Sulphuric Acid Plant in Homs* 287/93 6,000 739 - 5,261 5,261 31 Zeizoun Power Generating Station* 291/93 30,000 689 - 29,311 21,711 32 Agricultural Development in Jabal Al-Hoss* 307/95 2,500 832 - 1,668 744
33 Interconnection of Jordan and Syria Power Grids (Syria)*
312/95 30,000 - - 28,223 17,290
34 Syria-Turkey Power Grid Interconnection and Reinforcing the Syrian Internal Network*
314/95 26,000 2,936 - 23,064 10,714
35 Construction of 66 kV Substations in Six Governorates*
319/95 15,500 - - 11,902 5,880
36 Agricultural Development in the Coastal and Central Areas*
327/96 17,500 6,559 - 10,941 3,741
37 Modernization of the Communications System in Syria (1.650 million new lines)*
351/97 26,000 - - 21,950 11,840
38 National Control Center for the Electric System* 366/98 10,000 - - 7,382 3,575 39 Integrated Development in the Badia* 368/98 20,000 - - 14,659 5,970 40 Lattakia - Ariha Motorway 379/98 30,000 - - 26,829 11,180
41 Modernization of the Communications System (Subscribers’ Networks)*
384/99 30,000 - - 30,000 10,260
42 The Expansion and Conversion to Combined Cycle of Nasrieh Power Plant*
409/2001 25,000 - - 9,293 2,860
43 Transformation Stations in the Industrial Cities of Rif Dimashq, Homs and Aleppo Provinces*
429/2002 9,000 - - 7,371 1,750
44 Rural Development in Idlib Governorate 433/2002 5,500 - - 606 -
45 Converting Zeizoun Power Station to Combined Cycle*
440/2003 22,000 - - 13,654 2,950
Loans Extended to Beneficiary Member States 1974 - 2014
(KD 000)
ANNEx 5PAGE 7 OF 21
* Completed Project.
82 Annual Report 2014
No. Country / Project LoanNo.
Amountof Loan
Cancelled Loans and Balances
Disbursements During 2014
Disbursements as at
31/12/2014
Repayments as at
31/12/2014
(6) Syrian Arab Republic
46 Power Generating Station in the South (Deir Aly)* 469/2004 30,000 - - 29,643 -
47 Arab Gas Pipeline Project - Third Stage (Aleppo - Kalas Section)
529/2008 10,000 - - 1,881 -
48 Expansion of Deir Ali Power Generating Station 536/2008 45,000 - - 20,169 - 49 Deir Al-Zor - Al-Boukamal Road 537/2008 16,000 - - 33 -
50 Power Generating Station in the Eastern Region (Deir Al-Zor)
493/2006 30,000 - - - -
51 Power Generating Station in the Eastern Region (Deir Al-Zor) - (Supplementary Loan)
565/2011 30,000 - - - -
Subtotal 696,975 39,447 - 467,123 273,023(7) State of Libya
1 Two Fish Packaging Plants in Sabrata and Zlaiten*
240/90 11,000 1,867 - 9,133 9,133
2 Libya-Tunisia Power Link * 244/90 2,200 784 - 1,416 787
3 Interconnection of the Libyan and Egyptian Power Grids (Libya)*
326/96 12,000 2,590 - 9,410 6,650
4 National Control Center for the Libyan Electrical System*
69 Construction of Ma’rib Gas-Turbine Electrical Generating Station*
447/2003 25,000 - - 24,531 5,490
70 Major Intersections in Sana’a City 453/2003 15,000 - 303 14,574 4,015
71 Grain Silos and Flour Mills at Saleef Port (Supplementary Loan) (P)*
3P/2004 2,000 - - 2,000 2,000
72 Completion of Sanitation Networks in Sana’a 463/2004 12,000 - 312 10,342 2,79373 Five-Star Hotel in Sana’a (P)* 4P/2004 6,000 - - 6,000 3,43674 Rural Access Roads 467/2004 26,000 - 357 21,145 3,350
75 Development of Local Communities (Phase III)*
477/2005 15,000 - - 15,000 1,620
76 Aden Iron Factory in Lahaj Governorate (P)* 5P/2006 7,000 - - 7,000 3,68077 Social Development Fund - Phase III* 480/2005 15,000 - - 15,000 1,62078 Wastewater Facilities in Seiyoun and Tarim 482/2005 15,000 - 1,627 1,767 -
79Construction of a Second Ma’rib Gas-Turbine Power Generating Station and the Expansion of the Transmission Grid
502/2006 30,000 - 17,856 25,677 -
80 Agricultural and Fisheries Development in the Hadramout Coastal Area
508/2007 12,000 - 211 561 325
81 Aden Iron Factory in Lahaj Governorate (Supplementary Loan) (P)*
7P/2007 3,000 - - 3,000 1,320
82 Sana’a International Airport Development (Phase II) 516/2007 47,000 - 1 1 -
83 Development of the Coastal Road in Aden Governorate
520/2007 10,000 - 653 1,987 -
84 Development of Water and Wastewater Facilities in Aden Governorate
526/2008 10,000 - 138 294 -
85 Glass Factory in Sana’a Governorate (P) 9P/2008 3,175 - 175 3,114 - 86 Taez International Airport Development 533/2008 7,000 - - - - 87 Major Intersections in Sana’a City (Phase II) 541/2009 8,000 - 75 6,896 19588 Sugar Refinery in Aden (P) 10P/2009 8,250 - - - -
Loans Extended to Beneficiary Member States 1974 - 2014
(KD 000)
ANNEx 5PAGE 12 OF 21
(P): Private Sector Project.* Completed Project.
Annual Report 2014 87
No. Country / Project LoanNo.
Amountof Loan
Cancelled Loans and Balances
Disbursements During 2014
Disbursements as at
31/12/2014
Repayments as at
31/12/2014
(9) Republic of Yemen89 Al Mukalla Iron and Steel Factory (P)* 11P/2009 4,800 256 - 4,544 - 90 Rural Roads Development (Phase III) 545/2009 15,000 - 2,237 2,873 - 91 Protection of Sana’a City from Floods 550/2010 7,000 - 2,045 4,667 - 92 Social Fund for Development (Phase IV) 560/2010 30,000 - 13,449 20,321 - 93 Major Intersections in Sana’a City (Phase III) 562/2011 10,000 - 2,818 3,281 -
5 Rehabilitation of Electricity Installations (Supplementary Loan)*
304/94 7,000 291 - 6,709 5,285
6 Zahrani Power Station* 305/94 30,500 - - 30,500 24,9007 Saida and Sour Water Supply* 317/95 10,000 6 - 9,994 5,7198 Technical and Vocational Schools 323/96 15,000 - 155 14,100 10,320
9 Administrative Rehabilitation of Public and Independent Agencies*
325/96 6,000 5 - 5,995 3,931
10 Rehabilitation of the Infrastructure and Buildings Damaged by the Israeli Aggression*
331/96 13,500 - - 13,438 7,266
11 The Lebanese University Project (First Loan)* 355/97 23,000 - - 23,000 13,86012 Syr El-Dania Jbab El-Homr / El-Hermel Road* 356/97 6,000 173 - 5,827 2,241
13 Beirut Southern Entrances: Khaldeh-Cocodi and Awzaee Roads*
363/98 12,000 6,076 - 5,924 3,824
14 Interconnecting the Lebanese and Syrian Electric Grids at 400 kV*
400/2000 8,000 - 70 4,142 3,430
15 Conveyance of Litani Water to Southern Lebanon
418/2001 31,000 - 5,109 13,792 1,960
Loans Extended to Beneficiary Member States 1974 - 2014
(KD 000)
ANNEx 5PAGE 13 OF 21
(P): Private Sector Project.* Completed Project.
88 Annual Report 2014
No. Country / Project LoanNo.
Amountof Loan
Cancelled Loans and Balances
Disbursements During 2014
Disbursements as at
31/12/2014
Repayments as at
31/12/2014
(10) Republic of Lebanon16 Control Center for the Lebanese Power Network 423/2002 7,000 - 18 6,421 1,33017 Infrastructure Upgrading in Beirut City 430/2002 17,000 - 125 9,438 6,37018 The Lebanese University Project (Second Loan)* 439/2003 6,000 1,583 - 4,417 1,749
19 Development of the Road Network and Main Intersections
Loans Extended to Beneficiary Member States 1974 - 2014
(KD 000)
ANNEx 5PAGE 17 OF 21
** Fully Cancelled Loan.(P): Private Sector Project.* Completed Project.(1) The amount of the loan was reduced from KD 6.40 million to KD 5.15 million due to the change in the description of the project.
92 Annual Report 2014
No. Country / Project LoanNo.
Amountof Loan
Cancelled Loans and Balances
Disbursements During 2014
Disbursements as at
31/12/2014
Repayments as at
31/12/2014
(14) Islamic Republic of Mauritania
5 Nouadhibou Power Station (Supplementary Loan)* 81/82 200 - - 200 200
6 Potable Water to the Rural Areas* 86/82 400 12 - 388 388