Kuwait agrees $104bn support fund for real estate

NEW FUND: Sheikh Salem Abdulaziz al-Sabah, the governor of Kuwait Central Bank, which will oversee the support package.

Kuwait's cabinet has agreed on a KD30bn ($104bn) support package to finance a string of development projects, with the funding to be supervised by the Central Bank.

Al Watan daily reported that the new package is designed to help local real estate firms, as well as boost confidence in the banking system in order to ensure the completion of key projects.

According to a government insider quoted by Al Watan, the cabinet plans to support banks by guaranteeing the funds they hold, or providing long-term credit facilities which can help banks to raise necessary financing.

The government will also look to ease lending conditions and support the Central Bank's financing activities.

The newspaper said the average cost of annual investment in any of the development projects has been estimated at around KD7.7m.

The projects will be carried out in a number of fields including oil and natural gas extraction, and extensive infrastructure development including the modernisation of the country's sewerage system.

Al Watan added that during next week's cabinet meeting, Sheikh Ahmad Al-Fahad Al-Sabah, Deputy Prime Minister for Economic Affairs and State Minister for Housing and for Development, is expected to unveil a strategy to detect and deter financially unsound private sector investors who may be unable to commit fully to their obligations.