OPEC Fund Approves New Financing to Fulfill its Climate Action Plan

OrganizationsInternational Organizations ♦ Published: March 15, 2023; 22:23 ♦ (Vindobona)

The OPEC Fund for International Development (OFID) approved more than $300 million in new funding in the first quarter of 2023, reflecting the institution's commitment to fulfilling its Climate Action Plan. Three of the four projects approved by the OPEC Fund's Governing Board directly support climate finance.

As part of its Climate Action Plan, the OPEC Fund approves over US$300 million in new financing. / Picture: © Wikimedia Commons / Niels Elgaard Larsen [CC BY-SA 3.0 (https://creativecommons.org/licenses/by-sa/3.0)]

The OPEC Fund adopted its first dedicated climate action plan in September 2022. The plan commits the organization to increasing the share of its climate finance to 40 percent of all new finance by 2030 and to mainstreaming climate action into the project cycle by making more investments in climate change adaptation, mitigation and resilience in energy, transport, agriculture, food, water and smart cities.

"OPEC Fund is proud to deliver on its climate commitments, as well as ensure a positive impact for people and the planet," announced Director General Dr. Abdulhamid Alkhalifa, stating, "These efforts will help our partners in Africa, Asia and Latin America improve their climate policies while building resilience to climate change. At the same time, our work on energy access and road infrastructure underscores our ongoing commitment to improving the lives of people around the world."

Approval of projects

A loan from Armenia of €50 million will support measures to increase climate resilience and mitigation through a series of reforms related to energy efficiency, air quality standards, and to finance environmental impact assessments.

A $150 million loan from Colombia will support strategies to promote sustainable and resilient growth by enhancing the government's capacity to plan climate action and promote energy transition.

A $100 million loan from India will help finance a 56-km ring road around one of the country's largest cities, serving a population of more than 4 million people. The financing will also be supported by a US$410,000 grant that will contribute to project preparation and implementation.

A $20 million loan from Seychelles will help the country strengthen policies to promote inclusive and sustainable growth. Planned measures include climate-related reforms in land development, consumer protection and fisheries regulations.