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An Amiri decree published in the official gazette on September 1 allows the Kuwaiti government to borrow from the Future Generations Fund to bolster the General Reserve Fund that finances the state budget according to Kuwait Times. The measure amends a 1976 law governing the fund which is managed by the Kuwait Investment Authority and was established to invest fiscal surpluses from oil revenues for future generations a Xinhua report stated. The decree ends a decades-long restriction on using the long-term savings vehicle for budgetary support while introducing detailed preconditions for any such borrowing the official text shows.
Each loan must specify its exact amount purpose interest rate repayment duration and schedule along with provisions for potential rescheduling Kuwait Times reported. Repayment from state revenues receives priority whenever a budget surplus is recorded and the loan cannot be reduced or written off except through new legislation according to the decree’s provisions. The explanatory memorandum accompanying the decree frames the changes as a way to balance immediate financing needs against protection of the fund’s core assets a Bloomberg assessment found.
Annual borrowing in any fiscal year cannot exceed 100 percent of the fund’s average returns over the previous five audited fiscal years while total outstanding loans are capped at 10 percent of the fund’s net asset value based on the latest audited statements Kuwait Times detailed. No additional loans may be taken if either limit is reached and borrowing can only resume once the ratios fall back within the prescribed ceilings the decree stipulates. These safeguards aim to prevent depletion of the sovereign wealth vehicle whose assets exceed one trillion dollars according to a Bloomberg compilation of official figures.
The Future Generations Fund forms part of Kuwait’s broader sovereign wealth structure that ranks among the world’s oldest having been founded in the 1950s with the specific reserve established in 1976 to safeguard oil wealth for posterity Arab News reported. Kuwait first drew on the fund in 1990 during the Iraqi invasion a historical precedent noted in multiple regional accounts. The new mechanism treats each loan as an asset owed to the fund that must be recorded with its returns ensuring the principal remains protected over time the decree’s text confirms.
Cabinet approval is required for any borrowing alongside coordination with the Kuwait Investment Authority board under the amended framework a Zawya summary indicated. The measure arrives as Gulf economies navigate fiscal pressures stemming from the US-Iran conflict which has affected regional energy markets and state revenues according to a MEED analysis. Repayment is mandated upon realization of a budget surplus reinforcing the temporary nature of any draw on the long-term reserve Kuwait Times added.
The decree was issued alongside cabinet approval of separate draft laws on media regulation and governmental sukuk which were referred to the Amir for final endorsement Kuwait Times reported. Those parallel actions reflect ongoing legislative efforts to modernize various aspects of governance and public finance in the country. The borrowing provisions take immediate effect upon publication in the official gazette and are expected to provide a structured avenue for addressing any short-term liquidity requirements without compromising the fund’s long-term integrity.
