OPEC Fund: A Record Year for Development and Sustainability

PeopleOther ♦ Published: January 30, 2024; 15:37 ♦ (Vindobona)

The OPEC Fund for International Development has had an unprecedented year as the institution stepped up its global development assistance efforts, committing a record-breaking US$1.7 billion to 55 projects worldwide. These funds, designed to address the challenges of climate change, support the energy transition, and strengthen social and economic resilience, mark a turning point in the Vienna-based Fund's efforts to promote sustainable growth worldwide.

The OPEC Fund for International Development, a multilateral development finance institution based in Vienna, has increased its new commitments in 2023 to USD 1.7 billion for 55 projects worldwide. / Picture: © Wikimedia Commons / Niels Elgaard Larsen [CC BY-SA 3.0 (https://creativecommons.org/licenses/by-sa/3.0)]

The Director General of the OPEC Fund, Dr. Abdulhamid Alkhalifa, emphasized the increasing importance of the Fund at a time of global uncertainty. "In a year characterized by global challenges, the OPEC Fund has expanded its capacity to meet the growing needs of our partner countries," said Alkhalifa. The expansion of the lending program in various sectors and the mobilization of development assistance through partnerships with other multilateral development banks demonstrate the Fund's proactive role in the international development community.

The Fund's investments in 2023 spanned several continents, with a significant share of funding going to Africa (42 percent), followed by projects in the Middle East, North Africa, Europe, Central Asia, Latin America, the Caribbean, Asia and the Pacific. The broad geographical spread of projects reflects the global mandate of the fund, which aims to support development projects in low- and middle-income countries.

A significant proportion of the funds were used for policy-oriented financing aimed at supporting governments in the implementation of programs to promote sustainable development. For example, projects were financed in Botswana, Côte d'Ivoire, Armenia, North Macedonia, Colombia, and Paraguay to strengthen their economic, social, and climate resilience.

In addition, the fund has made significant investments in the transport and warehousing sector, including support for the construction of roads and sustainable transport infrastructure in India, the Kyrgyz Republic, Tajikistan, Uzbekistan, and Bosnia and Herzegovina. These projects aim to improve connectivity and thus economic development in the respective countries.

The promotion of renewable energies was another focus of the fund in 2023, with projects such as the development of a solar plant in Niger and wind farms in Azerbaijan and Uzbekistan. These investments are in line with the OPEC Fund's Climate Action Plan, which aims to dedicate 40 percent of all new funding to climate action by 2030.

In addition to these direct investments in development projects, the OPEC Fund has strengthened its presence in the capital markets. The successful issuance of a benchmark SDG bond at the beginning of the year raised USD 1 billion earmarked for sustainable development projects. This move, together with the Fund's high credit rating of AA+ with a stable outlook from Standard & Poor's, underlines the confidence of the international community in the Fund's ability to make a significant contribution to global development.