Kuwait’s political hiatus brings opportunity
29 August 2025
Commentary
John Bambridge
Analysis editor
After Kuwaiti Emir Sheikh Mishal Al-Ahmad Al-Jaber Al-Sabah took the unusual step of suspending Kuwait’s parliament in May 2024, the country anticipated a rush of reforms and the unblocking of the project pipeline.
In March 2025, the government delivered on the most significant part of that, passing the long-awaited new public debt law, allowing $65bn in sovereign and Islamic bonds to be issued over the next 50 years. In June, Kuwait began moving ahead with plans to issue bonds worth an estimated KD2bn ($6.6bn) to cover its projected financing needs for the 2025-26 fiscal year.
With the ability to now take on debt as needed, the country’s budget can be decoupled to a degree from the volatility of global oil market cycles. Also significant is the reported consideration of the setup of a KD50bn ($163bn) domestic investment fund that could become a transformative engine for Kuwait’s future.
March also heralded a new mortgage law that has ended prior restrictions, bringing property loans more in line with international norms in a way that will open up new avenues of growth for the banking and real estate sectors.
In the projects market, however, while the value of planned projects has swollen, actual contract awards increased only modestly in 2024 and are on track for a similar performance in 2025. The more optimistic industry analysts have chalked this up as a temporary situation that will be corrected when the projects now in pre-execution push through to the execution phase. More cynical observers have suggested, however, that there may be more wrong with Kuwait’s project sector than just budgeting.
The Al-Zour North independent power and water plant phase 2 & 3 is a case in point, having travelled through several planning iterations from the point of its launch in 2006 up until its final award in August. This comes despite Kuwait’s rapid approach to the limits of its own power generation capacity – limits it then exceeded in April 2025, when soaring temperatures caused demand for electricity to outstrip supply, bringing power cuts.
Despite all this, the award of the long-awaited Al-Zour North scheme is a hopeful sign that Kuwait is on the move once again – as it will need to be. With an enfeebled private sector, atrophied contracting industry and mounting public wage bill, the policy needs of the day are great in Kuwait.
While the emir’s consolidation of power has given the government a rare opportunity to act decisively – with the political hiatus already delivering key outcomes that years of parliamentary debate could not – the real test will be whether a credible economic transformation can be set in motion while Kuwait still has the time to act.
MEED’s September 2025 report on Kuwait includes:
> GOVERNMENT: Kuwait looks to capitalise on consolidation of power
> ECONOMY: Kuwait aims for investment to revive economy
> BANKING: Change is coming for Kuwait’s banks
> OIL & GAS: Kuwaiti oil activity rising after parliament suspension
> POWER & WATER: Signs of project progress for Kuwait's power and water sector
> CONSTRUCTION: Momentum builds in Kuwait construction
> DATABANK: Kuwait’s growth picture improves
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