The Opec Fund for International Development, a multilateral development finance institution headquartered in Vienna, Austria, expanded its new commitments to $1.7 billion across 55 projects globally in 2023, providing funding to address climate change and energy transition, support social and economic resilience and boost sustainable growth.

The organization was established 48 years ago and the 2023 results represent a record in new commitments.

Opec Fund Director-General Dr. Abdulhamid Alkhalifa said: “In 2023, the Opec Fund increased its impact through the delivery of development support in a challenging global environment. We grew our lending program across the board in response to strong demand by our partner countries and thanks to our success in raising additional funds from the capital markets. We were also able to leverage our partnerships to mobilize development support by working with multilateral development banks and development finance institutions such as the Arab Coordination Group. And we are well on track with our 2030 target to commit 40 percent of all new financing to climate action.”

In 2023, the Opec Fund delivered strong results across Africa (42 percent of investments), the Middle East and North Africa & Europe and Central Asia (20 per cent), Latin America & the Caribbean (20 per cent), as well as Asia and the Pacific (18 per cent) through public and private sector lending, trade finance and grants operations. 

The largest share in last year’s lending program was dedicated to policy-based-lending (31 percent). In cooperation with financing partners, the Opec Fund supported sustainable development government programs in Botswana ($100 million), Cote d’Ivoire ($74 million), Armenia ($54 million), North Macedonia ($54 million), Colombia ($150 million) and Paraguay (US$100 million) to bolster economic, social and climate resilience.

The transport and storage sector received the major share of Opec Fund’s support (14 percent) with the Opec Fund helping to build roads and sustainable transport infrastructure for improved connectivity in India ($100 million), Kyrgyz Republic ($15 million), Tajikistan ($10 million), Uzbekistan ($47 million) and Bosnia and Herzegovina ($28 million). 

Aligned with the Opec Fund Climate Action Plan, support in renewable energy projects constituted nearly 60 percent of all lending in the energy sector. The Opec Fund supported the development of a solar plant in Niger ($25 million), a 240 MW wind farm in Azerbaijan ($50 million) and two wind power plants in Uzbekistan totalling 1 GW of renewable energy capacity ($40 million).

Opec Fund energy sector investments also included projects to promote energy security in Tanzania ($30 million) and Bangladesh ($60 million), aligned with Sustainable Development Goal (SDG) 7 – Clean and affordable energy.

In the financial sector, the Opec Fund provided $171 million, partnering with governments and local banks to provide on-lending to small and medium-sized enterprises, promoting job creation and access to finance in Albania, Botswana, Paraguay and Vietnam. $273 million of trade finance was offered to partner banks to support the movement of critical commodities and goods in developing economies.

Aligned with its Food Security Action Plan, the Opec Fund provided $59 million to promote agricultural sustainability and fisheries in Benin, Liberia and Zimbabwe.

The institution also dedicated US$104 million towards education, $61 million to water and sanitation and US$50 million to health projects primarily in Africa and Asia. 

Successful development delivery in 2023 was also fuelled by the Opec Fund’s debut in the capital market, which the institution tapped for the first time in its history in January.

 The issuance of the Opec Fund’s benchmark SDG bond raised $1 billion for sustainable development projects.

The Opec Fund’s excellent standing in the market was confirmed in December when the international rating agency Standard & Poor’s assigned the Opec Fund a credit rating upgrade to AA+ with stable outlook, citing its “ambitious growth agenda”.

In 2023, the Opec Fund continued to expand partnerships with peer institutions including the Asian Development Bank (ADB), the African Development Bank (AfDB), the Arab Coordination Group (ACG), the European Bank for Reconstruction and Development (EBRD), Islamic Development Bank (IsDB), the International Atomic Energy Agency (IAEA), the United National Industrial Development Organization (UNIDO), and the World Food Programme (WFP) among others. -TradeArabia News Service