The Offset Program must be completed within 8 years of the effective date of the Supply Contract.

Kuwait Counter Trade Offset Development Fund

For a Supply Contract value of less than KD 5 million, a monetary contribution to the fund in lieu of the conventional Investment Project Package Proposal will be required. The amount of such contribution will be negotiated between the Ministry of Finance (Program Executive Office) and the contractor. These negotiations will take into account the technology, the expertise and the training which the contractor has available. This is in addition to any of the Incentives earned as above.

The Offset Program must be completed within 8 years of the effective date of the Supply Contract. Together with his tender documents a prospective contractor must submit his Investment Project Proposal covering at least 50% of the commitment agreement and a draft of such commitment agreement for Ministry of Finance (Program Executive Office) approval. The remaining 50% proposal must be submitted as per clause 'C'. Selected bidders will be invited to meet with the Ministry of Finance (Program Executive Office). All discussions shall be finished prior to the contractor being selected for that Supply Contract.

• Description, including advantages to Kuwait, and relevant linkages to existing industries.

• Identification of potential markets with a description and assessment of present business, along with a methodology of how to obtain what share of such market.

• An outline of the Project's processes including the physical and utility requirements, the degree of automation, manning and other skills required, raw material and opportunities for training.

• Type of technology for transfer and method and cost of effecting that transfer, including any expected Government or company restrictions that may be anticipated.

• The time scale.

• Financial Plan estimating total capital cost, sources of Equity and Debt and projected budgets and cash flows.

• The ownership structure, which identifies the activities and experience of the members of the consortium making up the contractor.

• An estimate of the Offset Incentives that would be accrued.

Documents that will have to be submitted as proof of the Offset Investment achievement, such as invoices, Bills of Lading etc. which have previously been agreed as acceptable by the Ministry of Finance (Program Executive Office).

C) Implementation of investment package over KD 5 million

• Submit proposals to the Ministry of Finance (Program Executive Office) of the Preferred Local Investment Partners.

• Request the Ministry of Finance (Program Executive Office) for assistance in finding suitable local partners.

• Within one year after the effective date of the Supply Contract, the contractor will submit Investment Project Packages that will fulfill at least half of the commitment.

• One year later the contractor will submit his Proposal Package for the remaining balance of his commitment.

• A further year later the contractor will have the first project under commercial operation

• In the fourth year the final project shall be in commercial operation or in the process of implementation.

• Eight years after the effective date of the Supply Contract the contractor will have all the businesses and projects operating as planned.

D) Approval packages which are submitted will contain the following:

• Feasibility study which includes the provision for using the latest technology and regularly updating that technology.

• A shareholders agreement, articles of association and conditions.

• The technology agreements and licensing arrangements.

• Written indications from an overseas government that the required export approvals will be granted, or in an event of lack of such approval, alternative sources identified.

• The applications for relevant Kuwait Government Agency approvals.

• The projection of the first three years of operation.

• The sources of Equity and Finance, along with the proposed terms.

The Ministry of Finance (Program Executive Office) will evaluate the feasibility study and then pass it to the relevant government agencies to issue licences and approvals.