Decree-Law No. 81 of 2026: Kuwait Opens a Regulated Borrowing Window into the Future Generations Reserve

Kuwait has issued Decree-Law No. 81 of 2026, amending Decree-Law No. 106 of 1976 on the Future Generations Reserve, to allow the State, for the first time, to borrow from the fund. The decree-law was published in Supplement 2 to Kuwait Al-Youm Issue 1806, dated 1 September 2026, and took effect on publication.

The amendment lets the State's General Reserve, the account that absorbs budget deficits, take loans from the Future Generations Reserve as an exception. Each loan requires a decision of the Council of Ministers, issued on the proposal of the minister who chairs the board of the Kuwait Investment Authority (KIA) and after KIA's board approves. The decision must state the loan amount, its purpose and return, its term and repayment schedule, and the rules for any rescheduling.

Two caps apply under the new Article (3 bis). Loans taken in any one fiscal year may not exceed 100 percent of the reserve's average realized returns over the last five audited fiscal years, and total outstanding loans may not exceed 10 percent of the reserve's net asset value under its latest audited accounts. If either ceiling is crossed, no new borrowing is permitted until the ratios fall back within the limits.

Each loan and its returns are recorded as a debt owed to the reserve, with priority of repayment from state revenues once the final account shows a surplus. A loan cannot be written off or reduced except by a law. The decree-law also changes how the annual transfer into the reserve is set: the percentage of any actual surplus is now fixed by the Cabinet on the proposal of the same minister, applying from the results of FY2018/2019. The explanatory memorandum says this wording avoids amending the law again if KIA moves to a different ministerial portfolio.

WEFAQ's view: the decree-law converts an absolute ban into a disciplined lending channel that protects the fund's principal while giving the State liquidity flexibility. The safeguards are substantive, from repayment priority to the bar on write-offs except by law. Attention now turns to the first Cabinet borrowing decision.

Read more: for the full analysis, read our companion blog article: 'Borrowing from the Future Generations Reserve: What Decree-Law No. 81 of 2026 Means for Business'.