“Al-Aijal” Supports the General Reserve Fund
- Balancing current requirements with the rights of future generations
- Reinforcing the principle of protecting the Fund’s assets and preventing any direct or unorganized withdrawals from it
- Enabling the state to manage its needs in a disciplined manner without compromising or depleting the principal wealth
- The loan has priority in repayment and may not, under any circumstances, be written off or reduced except by law
- Establishing a disciplined mechanism that allows for the utilization of realized returns on a sustainable basis
The Council of Ministers affirmed that “the financial reforms being implemented will pave the way for building a more sustainable and competitive economy in the medium and long term,” adding that “these positive indicators reflect the strength, resilience, and adequacy of the Kuwaiti economy.”
During its meeting chaired by His Highness Sheikh Ahmed Abdullah Al-Ahmad Al-Sabah, the Council stressed that “these reforms contribute to attracting foreign investments to the State of Kuwait and confirm the success of the state’s policy aimed at economic openness and supporting the trend toward making Kuwait an attractive financial and commercial hub, while providing sustainable employment opportunities for future generations.”
On another note, Law Decree No. 81 of 2026 was issued, amending certain provisions of Law Decree No. (106) of 1976 concerning the Future Generations Fund, which permits borrowing from the Future Generations Fund to support the state’s general reserves under specific controls and conditions.
The explanatory memorandum of the decree highlighted “the necessity of enabling the state to manage its needs in a disciplined manner without compromising or depleting the principal wealth, thereby achieving a balance between current requirements and the rights of future generations,” while emphasizing “reinforcing the principle of protecting the Fund’s assets and preventing any direct or unorganized withdrawals from it, and simultaneously establishing a disciplined mechanism that allows for the utilization of realized returns on a sustainable basis, ensuring full preservation of capital and achieving sustainability in asset growth and maximizing their returns in the long term.”
The decree authorized borrowing from the Future Generations Fund to support the state’s general reserves via a Council of Ministers decision that includes: the loan amount, its purpose and returns, the repayment period, the repayment schedule for the loan or its installments and returns, conditions and controls for restructuring or rescheduling the loan, and any other necessary data and provisions to regulate and implement the loan.
It also mandated registering the loan amount and its obligations, including installments and returns, as a receivable asset in the Future Generations Fund account. The loan shall have priority in repayment from state revenues upon the realization of a surplus in the general budget after the approval of the state’s final accounts. Under no circumstances may the loan be written off or reduced except by law.
1. The total loans during a single fiscal year shall not exceed 100% of the average realized returns of the Fund over the last five audited fiscal years.
2. The total outstanding balance of accumulated loans shall not exceed 10% of the net value of the Fund’s assets according to its audited financial statements for the last fiscal year.
3. No new loans shall be contracted if either of these ceilings is exceeded. This prohibition shall only be lifted after borrowing ratios fall back to the prescribed limits.
