OPEC Fund Provides $1.5 Billion in New Development Finance in 2021, Scales Impact and Makes Full Use of COVID-19 Facility
VIENNA, January 27, 2022 /CNW/ — With a total of US$1.5 billion committed in 2021, the OPEC Fund for International Development made a strong contribution to the global development agenda last year. The OPEC Fund, which celebrates its 46and anniversary on January 28, focused on helping its partner countries to increase economic resilience, boost economic growth and job creation through support to micro, small and medium-sized enterprises (MSMEs), provided much-needed funding for infrastructure investments and responded to the COVID -19 pandemic with the full deployment of its 1 billion US dollars ease.
Managing Director of the OPEC Fund Abdulhamid Alkhalifa said: “Thanks to our strong finances and close relationships with our partner countries and customers, the OPEC Fund has been able to respond quickly and effectively to the pressing needs of these countries in 2021. Our strong delivery has benefited a wide range of projects to meet the needs of people and improve their livelihoods. As we continue to pursue the Sustainable Development Goals, we have also been able to make a significant, rapid and effective contribution to the global response to the pandemic of COVID-19 As we celebrate our 46and anniversary and start a new year, our 2021 performance inspires confidence and ambition to make another major contribution to development this year.”
The OPEC Fund’s position as a multilateral development institution was also recognized in 2021 by Fitch and S&P, two of the world’s leading rating agencies. In its inaugural assessment of the OPEC Fund, Fitch assigned a rating of AA+/Outlook Stable, emphasizing the Fund’s “excellent capitalization”, while S&P assigned an AA/A-1+ rating, Positive outlook and highlighted the “strong funding and liquidity positions”.
Following the outbreak of the COVID-19 pandemic, the OPEC Fund created a 1 billion US dollars facility which was fully utilized by the end of 2021. In coordination with partner countries and other donors, the Fund has adopted an agile approval process, enabling the rapid deployment of urgently needed funding. Operations under the COVID-19 facility included a $70.5 million ready to Jordan in support of a government action plan and a US$10.0 million facilitated for the benefit of small and medium-sized enterprises Maldives.
A breakdown of operations shows that US$496 million Committed amounts were earmarked for the financial sector, traditionally used to on-lend to MSMEs or women-led businesses. Other sectors included agriculture (US$211 million), transportation and storage ($205 million), energy ($153 million), commodity aid (US$137 million), water & sanitation ($20 million) and health ($15 million). Cross-cutting multi-sector projects received US$246 million.
In the energy sector, the OPEC Fund has financed award-winning projects, which will significantly improve access to energy in partner countries and contribute to the energy transition. In cooperation with international partners, the OPEC Fund provided loans to support the construction and operation of the Sirdarya power plant in Uzbekistanthe largest private sector-led project in the country to date, and the Temane gas-fired power plant in mozambiquewhich is expected to meet the electricity demand of up to 1.5 million homes.
Financing from the OPEC Fund was intended to support public sector development initiatives in partner countries with US$686 million (46%), while trade finance accounted for US$444 million (30%) and loans to the private sector totaled US$353 million in 2021.
In terms of regional distribution, commitments in Africa came to 770 million US dollars (51%), followed by Asia with US$536 million (36%) and Latin America and the Caribbean with US$177 million (12 percent).
The adoption of a strengthened ESG policy in 2021 by the OPEC Fund Board of Directors marked a new step in the implementation of the institution’s 2030 Strategic Framework. The Framework is designed to enable the OPEC Fund to expand its operations and deepen its impact to address long-term challenges such as achieving the Sustainable Development Goals, as well as emergencies such as the COVID-19 pandemic. and its economic and social impact.
An important step towards this goal is to leverage the strength of the OPEC Fund by deepening cooperation with international development institutions and partner organizations. In 2021, the OPEC Fund co-financed projects with, among others, the African Development Bank, the Asian Development Bank, IFAD, the Arab Coordination Group, the World Bank and the International Finance Corporation (IFC). The OPEC Fund also signed an agreement to strengthen and promote cooperation in Latin America and the Caribbean with the Andean Development Bank (CAF – Corporación Andina de Fomento).
About the OPEC Fund
The OPEC Fund for International Development (the OPEC Fund) is the only globally mandated development institution that provides financing from member countries to non-member countries exclusively. The organization works cooperatively with partners in developing countries and the international development community to drive economic growth and social progress in low- and middle-income countries around the world. The OPEC Fund was established by OPEC member countries in 1976 to spur development, strengthen communities and empower people. Our work is people-centred, focusing on financing projects that meet basic needs, such as food, energy, infrastructure, employment (especially regarding MSMEs), clean water and sanitation, health care and education. To date, the OPEC Fund has committed over 22 billion US dollars to development projects in more than 125 countries with an estimated total cost of US$187 billion. The OPEC Fund was rated AA+/Outlook Stable by rating agency Fitch and AA/A-1+, Positive Outlook by S&P in 2021. Our vision is a world where sustainable development is a reality for all.
SOURCE OPEC Fund for International Development
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