Arab Fund for Economic and Social Development Annual
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ARAB FUND FOR ECONOMIC AND SOCIAL DEVELOPMENT ANNUAL REPORT 2007 Post Office Box 21923 Safat 13080, Kuwait, State of Kuwait Cable Address INMARABI KUWAIT Facsimile Transmission (965) 481-5750/ 481-5760/ 481-5770 Telex 22153 KT, 22143 KT Telephone (965) 495 9000 Electronic Mail [email protected] Internet Web Site www.arabfund.org Address Arab Organizations Headquarters Building Airport Road, Shuwaikh Kuwait - State of Kuwait Contents Contents Page No. Basic Information 5 Basic Financial Data as at 31/12/2007 6 Member Countries, Governors and Alternate Governors 7 Board of Directors 9 Letter of Transmittal to the Board of Governors 11 Overview 13 First Loans 15 Second Grants and Other Activities. 22 Third Financial Statements for the Financial Year Ended 31 December 2007 29 Annexes 37 Annex 1 Project Sheets for Loans Extended in the Year 2007 39 Annex 2 Capital, Resources and Status of Loans and Grants, 1972 - 2007 64 Annex 3 Summary of Loans Extended to Member Countries, 1974 - 2007 68 Annex 4 Sectoral Distribution of Loans Among Beneficiary 69 Member Countries, 1974 - 2007 Annex 5 Loans Extended to Beneficiary Member Countries, 1974 - 2007 71 Annex 6 Loans Extended to Finance Inter-Arab Projects, 1974 - 2007 84 Annex 7 Grants Committed and Disbursed, 1974 - 2007 86 Annex 8 Co-financing Activities of the Fund, 1974 - 2007 87 ANNUAL REPORT 2007 REPORT ANNUAL 3 Basic Information Introduction guarantees to corporations and enterprises The Arab Fund for Economic and Social possessing juridical personality, and parti- Development (“the Fund”) is an autonomous cipating in their equity capital; as well as providing other forms of financing and regional Pan-Arab development financing furnishing the requisite financial, technical organization. Its membership consists of all and advisory services in accordance with such countries that are members of the League of regulations and subject to such conditions as Arab States.* may be prescribed by the Board of Directors Establishment of the Fund and of the Fund provided for in Article (22) of the Agreement. Commencement of Operations The Agreement establishing the Fund (“the 3. Forming, or participating in, the equity Agreement”) was adopted by the Economic and capital of corporations possessing juridical Social Council of the League of Arab States on personality and whose objects concern the 16 May 1968. The General Secretariat of the implementation and financing of private League of Arab States declared the Agreement sector projects in member countries, effective as of 18 December 1971. The first including the provision and financing of meeting of the Board of Governors was convened the necessary technical, consultancy and on 6 February 1972, and the Fund commenced financial services. operations in early 1974. 4. Establishing and administering special funds whose purposes are compatible with that Purpose of the Fund of the Arab Fund, and whose resources are In accordance with the Agreement, the purpose provided by the Fund or other sources. The of the Fund is to contribute to the financing constituent instruments of such special funds of economic and social development in Arab shall define their purposes and functions, countries through: and set out the regulations governing their operations and administration. 1. Financing economic and social development projects by providing loans on concessionary 5. Encouraging the investment, directly or terms to governments and public enterprises indirectly, of public and private capital in a and corporations, giving preference to manner conducive to the development of the projects deemed vital to the Arab world and Arab economy. to inter-Arab projects. 6. Providing expertise and technical assist- 2. Financing private sector projects in member ance in the various fields of economic countries by providing all forms of loans and development. * With the exception of the Union of the Comoros. ANNUAL REPORT 2007 REPORT ANNUAL 5 Basic Financial Data as at 31/12/2007 (KD Million) Authorized Capital 800.00 Paid-up Capital 663.04 Resources (Paid-up Capital and Reserves) 2,535.04 Cumulative Loan Commitments 5,817.73 Cumulative Loan Disbursements 3,811.33 Cumulative Loan Repayments 1,733.68 Cumulative Grant Commitments 134.98 Cumulative Grant Disbursements 100.26 ANNUAL REPORT 2007 REPORT ANNUAL 6 ARAB FUND FOR ECONOMIC AND SOCIAL DEVELOPMENT Member Countries, Governors and Alternate Governors Member Countries (1) Governors(2) Alternate Governors(2) The Hashemite Kingdom of Jordan H.E. Ms. Suhair Al-Ali H.E. Mr. Nasser Shraideh The Republic of Tunisia H.E. Dr. Mohamed Nouri Jouini H.E. Mr. Omar Jilani The Algerian Democratic and People’s Republic H.E. Mr. Karim Djoudi - The Republic of the Sudan H.E. Mr. El-Zubair Ahmed El-Hassan - The Republic of Iraq - - The Kingdom of Saudi Arabia H.E. Dr. Ibrahim Bin Abd-El-Aziz Al- Assaf - The Syrian Arab Republic H.E. Dr. Mohamed Al-Hussein - The Great Libyan Arab People’s Socialist Jamahiriya H.E. Mr. Mohamed Al-Huwaij - The Arab Republic of Egypt H.E. Dr. Othman Mohamed Othman H.E. Ms. Fayza Aboul Naga The Republic of Yemen H.E. Mr. Abdulkarim Al-Arhabi H.E. Dr. Mohamed Ahmed Ali Al-Hawri The State of Kuwait H.E. Mr. Mustafa Al-Shamali - The Republic of Lebanon H.E. Mr. Nabil Adnan Al-Jisr H.E. Mr. Alain Bifani The Kingdom of Morocco H.E. Dr. Salaheddine Mezouar H.E. Mr. Abderrazak Lazrak The State of the United Arab Emirates H.E. Dr. Mohammed Khalfan Bin Kharbash - 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. Yousef Hussain Kamal - The Somali Democratic Republic* - - The Islamic Republic of Mauritania H.E. Mr. Abderrahmane Ould Hama Vezaz H.E. Mr. Sidi Mohamed Ould Bakha Sultanate of Oman H.E. Mr. Ahmed Bin Abdulnabi Macki H.E. Mr. Darwish Bin Ismaeel Bin Ali Al-Bulushi Palestine H.E. Mr. Abdulmohsen Al-Qattan H.E. Dr. Nabil Hani Al-Qaddumi The Republic of Djibouti H.E. Mr. Ali Farah Assoweh - (1) Countries are listed according to the original list of signatories to the Agreement Establishing the Fund, and according to the date of membership. (2) Names of Governors and Alternate Governors are given as at 31/12/2007. *Membership suspended pursuant to Board of Governors’ Resolution No.3 of 1993. The suspension was extended annually by the Board of Governors’ Resolutions until 2007. ANNUAL REPORT 2007 REPORT ANNUAL 7 Board of Directors Director General/Chairman of the Board of Directors Mr. Abdlatif Y. Al-Hamad Members of the Board Mr. Ibrahim Fayez Mr. Ali Bin Mohammad Redha Bin Jaffar Dr. Ahmed Mahrous El-Darsh Mr. Benaouda Merad Mr. Abdellatif Bennani Mr. Abdulwahab Al-Bader Mr. Ayad Amer Aboufayed Mr. Yousef Ben Ibrahim Al-Bassam ANNUAL REPORT 2007 REPORT ANNUAL 9 ARAB FUND FOR ECONOMIC AND SOCIAL DEVELOPMENT Letter of Transmittal to the Board of Governors Dear Mr. Chairman, Pursuant to Article (24) of the Agreement establishing the Arab Fund for Economic and Social Development, I am pleased to submit to the esteemed Board of Governors, on behalf of the Board of Directors, the 36th Annual Report, which presents the Arab Fund’s lending operations, grants and other activities during the year 2007, and its financial statements for the financial year 2007. Please accept, Mr. Chairman, the assurances of my highest consideration and esteem. Abdlatif Y. Al-Hamad Director General/Chairman of the Board of Directors April 2008 ANNUAL REPORT 2007 REPORT ANNUAL 11 Overview During 2007, the Arab Fund continued its lending projects in Lebanon and Oman, and a loan of program aimed at supporting Arab countries’ KD1 million for lease financing of small and medium- development efforts through implementation of size projects and enterprises in Mauritania. high-priority economic and social projects. The program focused primarily on infrastructure projects Cumulative loan commitments of the Arab Fund, in order to alleviate the existing deficiencies and since the commencement of its activities in 1974 provide an environment conducive to investment. and until the end of 2007, have reached about KD Priority was given to projects in the transport sector 5818 million and have contributed to approximately to develop road networks and ports, followed 27.1% of the total cost of the projects they helped by projects in the energy sector to raise power finance. Cumulative disbursements over the same generating capacity and expand transmission period amounted to about KD 3811 million, and distribution networks in Arab countries, then representing about 74.3% of the net amount of projects in the water sector to provide populations effective loans. The infrastructure sector received with this vital resource, in addition to projects in the majority of loans extended during this period, the agriculture and industry sectors. Loans were with a share reaching about 66.0% of the total, also extended to finance projects that addressed followed by the productive sectors with about urgent needs in some Arab countries. Furthermore, 22.6%, then the social services sectors with about the Arab Fund continued to allocate grants to 8.7%, and finally projects in other sectors which member countries to enhance the efficiency of received about 2.7% of the total. their institutions, undertake studies, organize conferences and seminars, as well as implement The Arab Fund also provided 35 grants during emergency programs. 2007, for a total amount of about KD 11.3 million. A large share of these grants, representing about The Arab Fund extended 16 loans in 2007 for a 44.9% of the total, was allocated to support total amount of KD 368 million. These loans were the implementation of emergency programs in used for the implementation of 12 new projects and Oman, Lebanon and Mauritania. In addition, 4 previously financed projects in 8 Arab countries, about 38.1% of the total amount of grants was for a total cost of about KD 1900 million.