25 Nations Fail to Repay Kuwait, Totaling 118 Million Dinars

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KUWAIT CITY, Oct 10: The Kuwait Fund for Arab Economic Development clarified that its “sovereign” loans are not subject to cancellation, write-off, or waiver, adhering to a longstanding policy since its inception. The Fund confirmed that 25 countries have defaulted on repaying the principal loans, accumulating debts totaling 118 million Kuwaiti dinars in installment payments, reports Al-Rai daily.

Remarkably, 90 percent of these debts are attributed to five countries: the Syrian Arab Republic, the Republic of Sudan, the Republic of Yemen, the Republic of Cuba, and the Democratic People’s Republic of Korea (North Korea).

This information was disclosed in a memorandum to the Fund, provided by Foreign Minister Sheikh Salem Al-Sabah, in response to a parliamentary inquiry by MP Jarrah Al-Fawzan regarding the count of countries that defaulted or refused loan repayments.

The KFAED clarified that the distressed countries are either undergoing a period of political instability or facing international boycotts, preventing the Fund from engaging with them. It was noted that the Fund halts loan withdrawals if the borrowing countries fail to meet their payment obligations, including installments and interest, as specified.

The Fund underscored its stance of not entering into any loan agreements with defaulting countries until they settle their outstanding arrears. It reiterated that the loans it extends are considered “sovereign loans,” firmly non-negotiable or forgivable — a policy maintained by Kuwait since the Fund’s establishment.

In the past 15 years, the Fund has granted approximately 3 billion dinars in loans, with grants amounting to about 240 million dinars. The majority of grants, 85 percent, were allocated to fulfill Kuwait’s commitments and pledges regarding the Syrian refugee crises and the reconstruction of affected areas in Palestine.

Concerning loan repayments since the Fund’s inception, 407 loans have been repaid, totaling around 2 billion dinars by the end of July 2023, representing approximately 29.86 percent of the total loan value.

The repayment periods for these loans vary from 18 to 30 years, averaging 23 years. As a result, there are still outstanding loans for which borrowing countries are meeting their installment and interest obligations on a regular basis. According to the agreed repayment dates specified in these loan agreements, there are a total of 605 loans with an approximate lending value of 4.7 billion dinars. Out of this, about 2.2 billion dinars have been withdrawn, and approximately 1.4 billion dinars have been repaid.

The Development Fund reported that the total loans it granted to the Lebanese Republic amounted to about 286 million dinars.

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