Kuwait’s government has been granted authorization to borrow from the country’s sovereign wealth fund, ending a longstanding prohibition on such transactions, according to an Amiri decree issued Tuesday. The move aims to provide financial support to the state general reserve, which underpins the national budget.

The sovereign wealth fund in question, known as the Kuwait Future Generations Fund, was established in the 1950s to manage the country’s fiscal surpluses and is currently overseen by the Kuwait Investment Authority (KIA). The decree permits borrowing from this fund, contingent upon Cabinet approval, to bolster the General Reserve Fund, which is primarily funded through Kuwait’s budget revenues.

The decree imposes several conditions on any borrowing arrangement. Each loan must have a specified amount, clear purpose, defined interest rate, fixed duration, and a repayment schedule. Moreover, the terms of any repayment rescheduling must be explicitly stated. Importantly, repayment of such loans is prioritized from state revenues, and any reduction or cancellation of the loan principal can occur only through formal legislation.

The decree further restricts the scale of borrowing from the sovereign fund. Total loans within a fiscal year cannot exceed the average returns earned by the Kuwait Future Generations Fund over the previous five years. Additionally, these loans must not surpass 10 percent of the fund’s asset value. Should these limits be reached, no additional borrowing from the fund is permitted until conditions change.

Separately, on the same day, Kuwait’s Cabinet approved draft laws on media regulation and governmental sukuk (Islamic bonds), forwarding both to His Highness the Amir Sheikh Meshal Al-Ahmad Al-Jaber Al-Sabah for final endorsement. The Cabinet described the proposed media regulation framework as a response to significant technological and digital shifts that have reshaped publishing, broadcasting, and communication sectors.

Officials also reiterated a commitment to ongoing fiscal reforms designed to promote a more sustainable and competitive economy over the medium to long term. The new borrowing authorization from the Future Generations Fund is expected to complement these broader fiscal initiatives by providing a mechanism to stabilize budgetary resources while maintaining stringent oversight of public finances.