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.
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.
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.
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 wouldl 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 Fund may provide loans to covers the costs of funded projects either in foreige currencies or in the currency of the borrower country or in foreign currencies as well as such local currency , as may be agreed between the Fund and 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.
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.