Kuwait Issues Decree Allowing Government to Borrow From Future Generations Fund

On September 1, 2026, Kuwait's Council of Ministers issued a decree permitting the government, for the first time, to borrow from the Future Generations Fund (FGF), the country's sovereign wealth fund managed by the Kuwait Investment Authority (KIA). The move ends a longstanding prohibition on tapping the fund and is intended to support the state's General Reserve Fund, which finances the government budget. The decree sets defined limits on the borrowing mechanism. Each loan must specify its amount, purpose, applicable interest, duration, and repayment schedule. Repayment to the fund takes priority in the allocation of state revenues, and outstanding loans cannot be reduced or written off except by a separate law. Annual borrowing is capped at the fund's average returns over the preceding five fiscal years, while total outstanding loans may not exceed 10 percent of the fund's total assets; once either threshold is reached, no further loans may be issued. The same Cabinet session also approved draft decree-laws on media regulation and government sukuk (Islamic bonds), both of which have been referred to Amir Sheikh Meshal Al-Ahmad Al-Jaber Al-Sabah for final approval. Kuwaiti officials have described the measures as part of a broader package of fiscal reforms intended to diversify the state's financing options amid continued reliance on oil revenue. For businesses operating in Kuwait, the reform signals continued government attention to fiscal sustainability and may precede further changes to public financing and investment policy in the months ahead.