52 years of economic development

52 Years of Economic Development

/Munzer Hamdieh Presented by :Yousef Al-Bader

Prepared by: Alyaa Al-Mousawi

The State of Kuwait

Kuwait

Kuwait as a country was established in the early 17th century, and has been ruled by Al-Sabah Family since they were elected by the rest of the Kuwaiti Families.

Before the exploration of oil in 1934, Kuwait was a mercantile center & port.

The people of Kuwait depended mainly on the sea to earn a living.

Kuwait - Discovery of Oil

February 1938, Oil was discovered in Burgan Oil Field.

Kuwait - Independence

Kuwait got its independence on June 17, 1961. During the rule of his highness The late Amir of Kuwait Abdullah Al-Salem Al-Sabah.

Sheikh Abdullah’s reign was so central to the evolution of modern Kuwait and its constitution.

The date on which he had ascended the throne in 1950 (February 25) was designated National Day.

Establishment of Kuwait Fund

Established in 1961 as a bilateral financial – aid agency.

1st national institution founded by a developing country to help developing nations.

- Initial capital = KD 50 million (US$ 165 million) - Geographical coverage = Arab Countries.

Today 2014Our current capital KD 2 billion (US$ 6.6 billion)Geographical coverage = 104 countries worldwide

Kuwait Fund - Capital

Initial Capital = 50 million K.D. 100 million K.D. In 1963 , 200 million K.D. In 1974, 1000 million K.D. (Geographical

distribution was expanded to cover all non-Arab countries requiring development assistance in addition to Arab countries).

In 1981, 2000 million K.D. Today , The Kuwait Fund still retains the 2000

million K.D. in terms of official capital, in addition to two reserved capitals surpassing 2000 million K.D. (The geographical distribution : 104 countries. )

UN Development Mandate (1974)

It stipulates that industrial as well as oil producing countries allocate 0.7% of their GDP to development assistance.

The UN Development Goals

Achieve Universal Primary Education.

Promote Gender Equality & Empower Women.

Reduce Child Mortality.

Improve Maternal Health.

Combat HIV, Aids , malaria & other diseases. Ensure Environmental Sustainability.

Develop a Global Partnership for Development

Eradicate Extreme Poverty & Hunger.

KUWAIT FUND CONTRIBUTIONS TO DEVELOPMENT INSTITUTIONS UP TO 6-03-2014

Committed (Million US$)

Paid Up (Million US$) Institution

560 560 Arab Fund for Economic & Social Development

48.23 48.23 Arab Bank for Economic Development in Africa

African Development Bank Group

• African Development Bank• African Development Fund

109 11.06

243 212

7 7 Inter – Arab Investment Guarantee Corporation

117 117 International Development Association

68.3 51 International fund for agricultural Development (IFAD)

• IFAD Special Program for Sub-Saharan African Countries

241 109

47 14 Arab Gulf Program for United Nations Development Organizations.

1,439 1,128 Total

Fund Activities

The Scope of our operations can be extended to any country that requires development & financial assistance.

Types of assistance- Loans- Grants & Technical Assistance- Contributions to Multilateral

Development Institutions

Geographic Regional Distribution of Fund’s Loans

Arab Countries

Central Asia & European Countries

West African Countries

South East Asia

&Pacific Countries

Latin America & The Caribbean Countries

SouthCenter

&East African

Countries

Geographical Distribution of Fund’s Loans (06\03\2014)

% Amount in (Million US$)

No. of Loans No. of Countries

Regions

56.24 9,818 326 16 Arab Countries

18.50 3,229 162 19 East, South Asia & The Pacific Countries

9.86 1,722 153 19 West African Countries

7.31 1,276 120 21 Central, South & East African Countries

5.86 1,022 58 17 Central Asian & European Countries

2.23 388 39 11 Latin American & The Caribbean Countries

100% 17,455 858 103 Total

Geographic Regional Distribution of Fund’s Loans (06\03\2014)

Arab Countries 56.24

East, South Asia & The Pacific

Countries

18.50

West African Countries

9.86

Central, South & East African

Countries

7.31

Central Asian & European Countries

5.86

Latin American & The Caribbean

Countries

2.23

Sectoral Distribution of Fund’s Loans

Agriculture

Transportation

Power

IndustryWater &

Sanitation

Social

Telecommunications

Development Bank

Sectoral Distribution of Fund’s Loans 06/03/2014

% Loan Amount in million US$

No. Of Loans Sector

35.53 6,202 362 Transportation

26.56 4,636 149 Energy

11.31 1,975 120 Agriculture

9.36 1,634 83 Water & Sewage

7.02 1,226 63 Industry

4.62 805 32 Social

2.63 458 18 Development Banks

1.00 174 17 Miscellaneous

1.97 344 14 Telecommunication

100 17,455 858 Total

Sectoral Distribution of Fund’s Loans 06/03/2014

Energy 26.56

Agriculture 11.31

Water & Sewage

9.36

Transportation35.53

Industry 7.02

Development Banks 2.63

Social 4.62

Miscellaneous 1.00

Telecommunication 1.97

Tunisia – Arab Countries Grants & Technical Assistance

Name

Tech. & Econ. Feas. Study For The Sediment & Protection Of The Coastline From Sea Erosion Project In Bogrbh Djerba

Tunisia – Arab Countries Loans

Amount in Million US$ Project Name

13.020 Sidi Salem Dam

10.863 Utilization Of Treated Sewage Water

10.880 Madjerda Valley Stage (ii)

8.130 Eisckel Lake Plains Drainage

24.830 Siliana Dam

30.600 Integrated Rural Development Pogramme In The Republic Of Tunisia

6.800 Madjerda Valley Stage (i)

8.457 Operation Program Of National Bank For Economic Development (1975-1977)

12.924 La Goulette Power Stage (i)



15.485 La Goulatte Power Stage (ii)

20.043 Kaf Echfair Phosphate Mining

22.097 Rehabilitation And Maintenance Of Siape's Plants

6.800 Phosphate Mines Development

20.400 Two High Institutes For Technological Studies

9.355 Turki-hammamat Highway

10.731 Sidi Omar Bu Hijla-alsokheira Road

22.052 Southern Suburbs Of Tunis City Railway

3.060 Gas Pipe Line Between El-borma Oil Field And Gabes



2.069 Gabes-medenine Railway

33.720 Hammamat Masakin Highway

9.690 Fishing Ports At Sfax, Chabba And Zarzis

22.429 Improvement Of Roads Network

13.600 Tunis-carthage Airport

11.728 Tunis-turki Highway

7.650 Binzert Bridge

23.800 Agricultural Roads

85.000 Development Of Transmission And Distribution Network Of Natural Gas



23.800 Water Production And Distribution In Northern Tunisia

17.153 Benzert Water Supply

16.469 Greater Tunis Sewerage And Drainage (third Stage)

21.283 Water Supply For Greater Tunis Project(phase Ii)

14.300 Hills Dams And Safeasefa Dam

Egypt – Arab Countries Grant and Technical Assistance

Name

Polyester Fibre Plant Extension

North Red Sea Water Supply And Sanitation

First African Regional Conference On Drainage: Cairo 6-9 December 2004

Financing The Activities Of The Strategic Documents Center In Respect Of The Economic And Social Reform Program In Egypt

Studies Related To A Research Project For The Production Of Membranes For Water Desalination

Project To Face Violence Against Children With Disability

Comprehensive Feasibility Study Of The Rehabilitation And Improvement Of Eastern Nag Hammadi Canal And Its Branches

Railway Electrification Project Damietta, Mansoura Tanta

Pilot Model For The Integration Of Children With Disabilities In Education

Egypt – Arab Countries – Loans


23.800 Rasheeed Promontory Shore Protection

68.000 Development Of 400 Thousand Feddan In North Sinai

85.000 Development Of 400 Thousand Feddan In North Sinai

48.960 Social Fund For Development

51.000 Social Fund For Development

68.000 Program Operation Of Social Fund For Development . ( Phase Iii )

88.400 Social Program To Assist The Rehabilitation And Development Of The Poultry Ind



132.023 Sidi Krir Thermal Power Plant.

33.962 Abu Qir Thermal Power Station

79.469 The Nobaria Power Plant Project (phase 1).

33.041 The Nobaria Power Plant Project (phase 2).

88.400 Talkha Power Station Development Project.

100.972 The West Cairo Power Plant

102.000 Al-atf Power Generation Station Project



102.000 Abu-qir Power Generation Station

68.000 Expansion Of Natural Gas Distribution Networks In Cairo And Giza (phase 1)

102.000 Second Loan Abu-qir Power Generation Station

102.000 El-ain El-sokhna Power Station Project

102.000 Banha Power Station

102.000 Helwan Power Station Project

33.128 Development Of Pharmaceutical Industry



32.758 Rehabilitation Of The Egyptian Iron And Steel Companys Mill's

23.800 Talkha Ii Fertilizer Plant

6.102 Talkha Ii Fertilizer Plant

34.000 School Construction Project

33.320 Suez Canal Development

11.793 Maritime Transport Expansion

15.300 Abu Qir Gas Field Development Stage (i)



00.043 Re-opening Of Suez Canal

11.833 Abu Qir Gas Field Development Stage (ii)

95.173 Natural Gas Pipeline From Al-arish To Al-aqabah Project

14.308 Development Of Suez Canal

24.779 Greater Cairo Wastewater(almaadi Tunnel)

20.400 Treatment And Utilization Of Sewerage Water Project In Al- Shorouk City - Phase1

13.429 Ras Shukair-Suez-Cairo Oil Pipeline



57.800 Expansion of Natural Gas Distribution Networks in The Governorates of Cairo and

Giza (Phase II)

102.000 Modernization of Banha – Zagazig Ismelia- Port Said Railway Line Control and Signalings

Afghanistan – South East Asia – Grants & Technical Assistance

Name

Farah Rad.

Reconstruction Of Afghanistan "artf"

Afghanistan – South East Asia – Loans


29.121 Baghlan Sugar Factory

Vietnam – South East Asia Grants & Technical Assistance

Name

F.s.: Cane Sugar Plantation & Processing Factory.

Vietnam – South East Asia - Loans


9.860 Dau Tieng Irrigation

20.303 Dau Tieng Agricultural

13.124 Van Dinh Water Logging Control

16.910 Ayun Irrigation

9.426 Dak Lak Province Irrigation

14.620 Rural Infrastructure Development Project In Ha Tinh Province

2.782 Nghe An Cement Plant

Vietnam – South East Asia - Loans


6.812 Dak Ta - Ngoc Linh Rural Road

13.600 Phu Thong-khang Ninh Road Project In Bac Kan Province

13.600 Cha To-muong Tung Road Project In Dien Bien Province

Kenya – Central, South & East Africa Grants & Technical Assistance

Name

The Studies for Bura Irrigation And Settlement Project

Kenya –Central, South & East Africa Loans

Amount in Million US$ Name

20.400 Bura Irrigation And Settlement Scheme Rehabilitation Project

6.800 Wajir Hospital Project

15.300 Development Of Schools Infrastructure In North Nyamira /

Borabu Project

20.400 Katumani-wote Road

20.060 Nuno - Modogashe Road Project

Serbia- Central Asia & Europe Loans


34.000 Belgrade Center Railway Station - Phase 1

Uzbekistan – Central Asia & EuropeGrants & Technical Assistance

Name

Institutional Support To The Uzbek Fund For Reconstruction And Development.

F. S. Water Supply Sanitation & Social Awareness

Rehab. Of Irrigation Network and Drainage System Pro. In Djizakh & Syrdarya

Uzbekistan – Central Asia & Europe Loans


14.756 The Rehab./const. Of Irrigation Net. And Drainage Sys. In Djizakh And Syrdarya

20.400 Rehabilitation And Equipping Of 171 Medical Emergency Department

11.900 Reahabilitation And Equipping Of A Cardio Surgery Building

21.080 Tashkent- Angren Railway Line Electrification

20.400 Guzar-chim-kukdala Highway Project

19.948 Improvement Of Water Supply Of Nukus And Urgench

Moldova – Central Asia & Europe Grants & Technical Assistance

Name

F.S. for the Diabetic Medical Center

T.A. For Improvement of Drinking Water Supply Network

Moldova - Central Asia & Europe Loans


6.460 Drinking Water

Cuba – Latin America - Loans


10.469 Santiago De Cuba Water Supply System Rehabilitation

14.960 Holguin Water Supply System Rehabilitation

25.500 Rehabilitation Of Water Network And Sewerage Project In Havana

Argentina - Latin America - Loans


35.943 Provincial Road Network Development

Project Cycle

1. Project / Loan Status: Pipeline

1.1. THE REQUEST

1.1.1. The Borrower's country should be a developing country. However, countries whose economies are in transition may be considered as eligible. No geographic, ethnic, religious, caste or cultural barrier restricts benefiting from the Fund's loans and assistances.

1.1.2. The request for assistance must be made by the governmental authority responsible for international cooperation and external borrowing.

Project Cycle 1.1.3. The requesting authority should indicate that the project is a priority

project to the government.

1.1.4 The project should have a strong public sector element and be of a developmental nature. The Fund's assistance is not limited to a particular sector. The project may be in any of the following sectors: infrastructure, agriculture, irrigation, transport, communications, energy, water supply, sewage treatment, education and health.

1.1.5 The project, if not in the education and health sectors, should be supported by a detailed techno-economic feasibility study. The feasibility of the project must be demonstrated by cost-benefit analysis and the calculation of an internal economic rate of return, with an indication of sensitivity to changes in parameters. For projects in the health and education sectors, it is sufficient to demonstrate the feasibility of the project through technical and social data, in addition to evidence establishing the need for the project. The studies of the project should include the proposed components, the cost estimates in local and foreign currencies, and the proposed financing plan. abidance to the "Kuwait Fund Requirements for the Preparation of a Feasibility Study" is advisable. It is preferable that the services of an independent specialized consultant be obtained for the preparation of feasibility studies.

Project Cycle 1.2. THE PRELIMINARY APPROVAL:

1.2.1. A team is formed by the Operations Department of Fund to prepare a memorandum regarding the project, summarizing the available information thereof.

1.2.2. If the recommendation of the team is positive, and if the studies are adequate, the Fund's management submits, on approval of the Board's Internal Loans Committee, a recommendation to the Board of Directors to, preliminarily, approve the participation in the financing the project.

1.2.3. Upon the Board's preliminary approval, the management of the Fund may proceed to consider the project for further evaluation.

Project Cycle 1.3. THE APPRAISAL:

1.3.1. A mission, composed usually of an engineering adviser, an economic adviser and a legal adviser, visits the country to appraise the project. The mission would visit the project site, collect all necessary project and sector information and, if satisfied, negotiate and initial a draft loan agreement before the end of the visit. The draft loan agreement would state the amount of the proposed loan, the lending terms and other conditions based on the findings of the mission.

1.3.2. Under normal circumstances, and in accordance with the regulations of the Fund, the amount of the loan would not exceed 50% of the total cost of the project and would not include financing of local costs of goods produced in the territories of the borrower.

1.3.3. Upon its return, the mission would prepares a project appraisal report which includes information about the economy of the country, the sector, the implementing agency, the project, the economic and financial viability of the project (if required), and the lending terms and conditions. Such report would be discussed in a meeting attended by all the technical staff of the Fund.

Project Cycle

1.4. THE FINAL APPROVAL:

1.4.1. Following discussion and approval of the project appraisal report by the Fund's management it is submitted to the Board of Directors with appropriate recommendations concerning participation in financing the project.

1.4.2. If satisfied, the Board of Directors grants the required approval. Following that, a date is fixed for the official signature of the of the loan agreement which usually takes place in the borrower's country.

Project Cycle

2. Project / Loan Status: Active:

2.1. THE EXECUTION:

2.1.1. The concerned government authority would invite offers from consultants for the provision of the required consulting services. Following the preparation of construction bidding documents and approval thereof by the Fund, bids may be invited from contractors for the construction of the project or from suppliers for the procurement of the required goods. Under normal circumstances, and in accordance with stipulations of the Loan Agreement, all biddings should be competitive, either through open international bidding or through restricted bidding.

2.1.2. The concerned government authority is expected to obtain the prior approval of the Fund on each implementation step, including, the evaluation of offers, texts of contracts, etc.

Project Cycle

2.1.3. Based on the signed and approved contracts, withdrawal applications for disbursements from the proceeds of the loan would be issued by the authorized representative of the borrower. The Fund would disburse, in accordance with the Fund's "Disbursement Procedures", through either direct payments to the beneficiary for construction of works and for services, which is the most common case, or through Letters of credit for procurements, or through reimbursement to the borrower against evidence of payment already made to the beneficiary.

2.1.4. The Fund expects to receive periodic reports from the borrower regarding the progress of the implementation of the project.

2.1.5. During the progress of the project, and especially whenever a problem arises, the Fund would mount a follow-up mission to visit the project site and discuss pending matters. Also, the fund may invite representatives of the borrower and of the co-financiers if any, to meet in Kuwait to discuss outstanding matters.

Project Cycle

3. Project / Loan Status: Completed

3.1. THE COMPLETION:

3.1.1. Upon completion of the project, the Fund expects to receive a final report from the Borrower.

3.1.2. After completion of the project, and if there is an unutilized uncommitted balance in the Loan, the Fund usually cancels the said balance and adjusts the repayment schedule accordingly. Under special circumstances, and subject to the approval of the management of the Fund, the borrower may utilize the said balance to finance additional works and goods directly related to the project, and clearly provided for in the Loan Agreement.

3.1.3. Under normal circumstances, the borrower starts repayment of the Loan after the expiry of a grace period. The said grace period, as indicated in the Loan Agreement, starts from the date of the first disbursement and lasts one year beyond the construction period of the project, thus allowing the borrower to repay the loan through deriving benefits from the project.

Kuwait Fund Requirements for The Preparationof A Feasibility Study

For Kuwait fund to be able to properly assess the potential of financing a development project, a complete feasibility study must be undertaken. If the said study is prepared in any language other than the english language, a translation to the english language is required. A typical study may contain the following sections:


The executive summary Will normally contain a brief introduction to the project, description of the contents of the following chapters, summary of costs and benefits-leading to its technical and economic viability (indicating the firr, and eirr), and recommendations to the course/s of action to be undertaken to implement the project


A - The economic and financial sections 1. Country economic background:

analyze the recent economic developments in the country using the most recent economic indicators obtained from reliable sources. The analysis should include the basic country characteristics, the available natural and human resources and their mobilization, the macroeconomic performance based on the sectoral developments, government finance within the framework of its fiscal policy, the financial sector performance within the framework of the government monetary and credit policy, and the external position including the bop and the external debt within the framework of the government international trade policy. The medium term prospect of the country should also be demonstrated taking into consideration the existing and

planned economic reform programs.


2. Project justification:demonstrate and prove the need and the importance of the project to the economy using micro, macroeconomic analysis, and market surveys if needed. The report should emphasize the prevailing market conditions and the expected situation after the implementation of the project.analyze the degree of market competition and/or concentration currently prevailing and the future prospective if applied to the project.

3. Project area of influencePopulation trends and economic activities in the project’s area of influence


4. Market surveys and the justification of the project: I) this section shall demonstrate and prove the need and the importance of the project to the economy using micro and macroeconomic analysis, market surveys if needed. The report should emphasise the prevailing market conditions and the expected situation after the implementation of the project. Demand and supply projections with and without the project shall be quantified with the proper parameters used in the projections.II) this section shall also contain the analysis of the degree of market competition and/or concentration currently prevailing and the future prospects if applicable to the project.


5. Economic analysis:

I). Calculate the shadow "economic" prices that can be used in calculating economic benefits of the

project.

II). Modify the financial cost of the project: investment, operation and maintenance and replacement costs, to exclude any direct transfer payments (i.e. Taxes, subsidies, etc.) And to include the shadow wage rates - if the labor market is not competitive - in addition to the other economic prices of the inputs used in the production process.

III).Value intangible costs and benefits of the project if available.Use the modified cash flows to calculate the economic internal rate of return (eirr).

IV).Demonstrate the sensitivity of the eirr to the changes in the value of the main variables.

V). Estimate the effect of the project on the following:

1. Employment2. Foreign exchange3. Pollution


Financial analysis:(this applies only to projects that can be appraised using the “financial internal rate of return” as an indicator of viability) I).Investigate the expected stream of income arising from the expected product mix of the project using the current prevailing prices.II).Utilize the estimated capital investment required.III). Estimate the annual operation and maintenance expenses.IV). Estimate any additional replacement cost that may be needed during the lifetime of the project.use the above mentioned parameters to calculate the financial internal rate of return (firr).V).Demonstrate the sensitivity of the firr to the changes in the value of the main variables.VI).Calculate the break-even point and the appropriate production mix and level.VII).Review the tariff and/or pricing policy of the products to insure its adequateness if necessary.VIII).Present informative current and projected financial reports concerning the implementing agency including but not limited to: Balance sheetIncome statementSources and uses of funds ratio analysis including liquidity, activity, profitability, debt, and debt coverage ratios, etc.


B - The technical section

1. Sector information:

I). An introduction about the importance of the sector to the country. Ii). The authorities responsible for the sector.Iii). Demands on the means of the sector and to which extent they are satisfied. Iv). Description in detail about all means of the sector and sub-sectors (if any) with statistics running for the last five years, at least, and an explanation of the trend of the statistics. V).Effect of the means of the sector on the environment. Vi). Sector budgeting and expenditures in the present country's budget plan, and to what extent they are satisfied and whether foreign investments are being utilized. Vii). Future sector development plans and means to finance and execute them, and whether foreign investment is required.


2. Project information: I).Aim of the project. II). Description of the project. III).Components of the project. IV).Technical soundness.

(a) principal engineering features, such as the type, location, capacity and characteristics of major facilities and their relationship to existing and future services.

(b) justification of the criteria, standards, location and extent of the facilities proposed as

compared with those existing and other available alternatives. (c) conceptual design or preliminary design and drawings of the elements of recommended

systems, sufficiently complete to provide a basis for reasonably-firm estimates of the bill of quantities and costs.

V). Estimated cost of the project, with detailed break-down

into:


1. Land acquisition2. Civil engineering works3. Electro-mechanical works4. Supplies5. Technical administrative assistance (training)6. Consulting services for design and supervision7. Physical contingencies, and8. Price contingency. It should be noted that all costs must be broken down into local and foreign currencies. The cost estimates should also refer to the basis on which the costs are estimated.

VI). Financing plan of the project. VII). Project implementation times schedule. VIII). Possibilities of future expansion. IX). Effects of the project on the environment. X). Operation, maintenance, and training requirements.

XI). Institutional requirements (facility management and financial management).


C. Project implementing agency information 1. The ministry or agency (or agencies) which is in-charge of the

project.

2. Establishing the ministry or agency ( law or decree, date and number).

3. The departments or divisions of such ministry or agency, with a description of their functions.

4. Organizational chart for the ministry or agency. 5. Assisting government agencies, if any. 6. Supervision of the project execution. 7. Maintenance of the project. 8. Total number of the staff of the agency: Engineers and their classification Technical personnel Other categories Nationals and foreigners


9.The possibility of assigning nationals to follow the implementation of the project. 10.Shortage in the workforce of the executing agency, if any – how treated;

Staff training Training centers and how financed, if any Future plans for training

11. The possibility of establishing a full-time unit to supervise the implementation of the project.

12. The possibility of formulating a unit to operate and maintain the project.


13.The agency managing the project, if different from the executing agency.

14. Similar projects carried out by the executing agency.

15. The financial structure and performance of the implementing agency:

(this section is applicable only to the cases in which the implementing agency is an autonomous entity and proven to be of legal and financial independence from the government, or wherever it is recommended to establish a new independent agency for the proper implementation and operation of the project)

I)The analysis of the financial structure and the financial performance of the implementing agency for the last five years, if applicable. The analysis should be based on the audited financial statements of the agency. The analysis shall indicate the agency's major accounting policies, fixed assets accounts details, short and long term debt obligations, equity details, etc. The analysis shall also include the major financial ratio indicators.


II)Projected financial statements for the implementing agency during and after the implementation of

the project. Such projections shall be done with the objective of assessing the ability of the implementing agency to service its existing and the new debt arising from financing the project. The projected financial statements shall cover at least 5 years of operation and shall include projecting the following statements:

Balance sheets,

Income statements, Sources and applications of funds statements.

III)financial ratio analysis including liquidity, activity, profitability, debt ratio, coverage ratio, ..etc.

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52 years of economic development

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