Decree-Law Issued Authorizing Borrowing from the 'Future Generations' Reserve Under Conditions and Regulations
A decree-law numbered 81 of 2026 was issued, amending certain provisions of Decree-Law No. 106 of 1976 concerning the Future Generations Fund. The amendment includes changes to the deduction mechanism from annual revenues for the benefit of the fund, and adds provisions regulating borrowing from the Future Generations Fund to support the State’s General Reserve, subject to specific controls.
The decree, published in the supplement of the Official Gazette “Kuwait Al-Yaum,” stipulated that deductions for the Future Generations Fund are made when annual revenues exceed expenditures. It also authorized borrowing from the fund to support the State’s General Reserve by a Cabinet decision, setting ceilings for loans and a repayment mechanism.
The articles of the decree are as follows:
Article One
The following texts replace the first paragraph of Article One, and the second paragraph of Article Two, of the aforementioned Decree-Law No. 106 of 1976:
Article One (First Paragraph):
“In the event that annual revenues exceed expenditures, an annual percentage of the actual surplus from the State’s final account results shall be deducted. This percentage shall be determined based on a proposal by the Minister presiding over the Board of Directors of the Public Authority for Investment and with the approval of the Cabinet, effective from the results of the fiscal year 2018/2019.”
Article Two (Second Paragraph):
“The Public Authority for Investment shall invest these funds and may use all necessary financial, investment, and financing instruments for this purpose. The returns on its investments shall be added to this account.”
Article Two
Two new paragraphs are added to the text of Article Three of the aforementioned Decree-Law No. 106 of 1976, and a new article numbered (Third bis) is added to the same decree-law, with the following texts:
Article (Third) – Two New Paragraphs:
“Notwithstanding the foregoing, borrowing from the Future Generations Fund to support the State’s General Reserve may be permitted by a Cabinet decision, based on a proposal from the Minister presiding over the Board of Directors of the Public Authority for Investment and after approval by the Board of Directors. This decision shall include the following:
1. The loan amount.
2. The purpose of the loan and the return on it.
3. The duration, and the timeline for repaying the loan or its installments and returns.
4. Conditions and controls for restructuring or rescheduling the loan repayment.
5. Any other necessary data and provisions to regulate and implement the loan.
In accordance with the aforementioned clauses, the loan amount – and the accrued returns – shall be recorded as a receivable asset in the Future Generations Fund account. The loan shall have priority in repayment from State revenues in the event of a surplus in the General Budget after the approval of the State’s final account. Under no circumstances may the loan be written off or reduced except by law.”
Article (Third bis):
“Borrowing from the Future Generations Fund shall be subject to the following controls:
1. The total loans during a single fiscal year shall not exceed 100% of the average returns achieved by the Fund over the last five audited fiscal years.
2. The total outstanding loan balance shall not exceed 10% of the net asset value of the Fund according to its audited financial statements for the last fiscal year.
3. No new loans shall be contracted if either of the ceilings stipulated in clauses (1 and 2) of this article are exceeded. This prohibition shall only be lifted after the borrowing ratios decrease to the prescribed limits.”
Article Three
Any provision contrary to the provisions of this decree-law is repealed.
Article Four
The Prime Minister and the Ministers – each within their respective competence – shall implement this decree-law. It shall be published in the Official Gazette and shall take effect from the date of its publication.
