OPEC Fund Annual Report 2024

Investing Today to Empower Tomorrow

2024 ANNUAL REPORT

TABLE OF CONTENTS

THE OPEC FUND FOR INTERNATIONAL DEVELOPMENT ANNUAL REPORT 2024

THE HIGHLIGHTS

At a Glance

Foreword by the President

Results

Strategy Update

Development Effectiveness

Climate Finance

Innovative Financing

Sustainable Development Goals

Partnerships

Knowledge

Private Sector

THE RESULTS

Operational Highlights

THE DELIVERY

Agriculture

Education

Energy

Financial Institutions

Grants

Health

Policy-Based Lending

Trade

Transport

Water

THE INSTITUTION

About the OPEC Fund

Our Members

Our Governance

Our Network

Our Staff

OPEC Fund Development Forum

THE ANNEX

Breakdown by Sectors

THE HIGHLIGHTS 01

01 | THE HIGHLIGHTS – AT A GLANCE

AT A GLANCE

Results

The OPEC Fund for International Development posted a record US$2.3 billion in new commitments, a 35 percent increase year-on- year, significantly growing its loan portfolio. Deployed across more than 70 projects worldwide, these commitments are combating the effects of climate change, improving global food security, advancing the energy transition and fostering sustainable economic and social development. Continuing to diversify its funding resources, the OPEC Fund issued a US$500 million public benchmark bond in January 2024.

THE OPEC Fund committed a record US$2.3 billion in new development finance in 2024

Impact

OPEC Fund projects completed or reaching early operational maturity during the period July 2023 to June 2024: • benefitted more than 75,000 farmers, • provided 300,000 households with new or improved energy connections, • financed 1,250 micro, small and medium-sized enterprises, • empowered almost 35,000 women, • built or rehabilitated over 500 km of roads, and • helped cut almost 75,000 tons in CO 2 emissions per year.

Growth

The OPEC Fund broadened its outreach by concluding framework agreements with Kazakhstan, Turkmenistan and Uzbekistan, the first project signing in Bhutan and the debut operation in Montenegro. The OPEC Fund also launched a new Island Resilience Facility and made a US$1 billion pledge to fight land degradation and desertification at the UN Conference to Combat Desertification (COP16) in Riyadh, Saudi Arabia.

01 | THE HIGHLIGHTS – AT A GLANCE

Climate Action

The OPEC Fund surpassed its Climate Action Plan target, which aimed to focus a quarter of all newly approved commitments on climate action by 2025, dedicating one-third of its financing to climate in 2022 and 34 percent in 2023. The OPEC Fund published its first annual Climate Finance Report in 2024.

Connectivity

Financial Innovation

Connecting people means supporting economies. With new commitments of US$370 million, transport infrastructure was the OPEC Fund’s largest sector in 2024. The six projects in Madagascar (US$30 million), Oman (US$180 million), Paraguay (US$50 million), Senegal (US$38 million), Tanzania (US$41 million) and Uganda (US$30 million) will deliver sustainable and climate resilient infrastructure to enhance connectivity.

The OPEC Fund and the Inter-American Development Bank (IDB) executed an

exposure exchange agreement, the first time this instrument was used beyond triple-A- rated multilateral development banks. The first sustainability-linked loans connected loan terms with the fulfilment of pre-agreed environmental, social and governance targets. The OPEC Fund also arranged the first loan syndication with a member country financial institution joining an A/B structure in support of small businesses in a partner country.

01 | THE HIGHLIGHTS – AT A GLANCE

Solidarity

Grants

The OPEC Fund entered a three-way arrangement with its member country Saudi Arabia to clear Somalia’s debt with the OPEC Fund and enable the restart of operations in the east African country. The OPEC Fund organized a roundtable for Sierra Leone to mobilize investments and earmarked US$250 million until 2030 in support of projects in the west African country.

Grant commitments rose markedly in 2024 compared to 2023, reaching a total of US$13.8 million. In line with the OPEC Fund’s overall strategy, grants played an increasing role in financing technical assistance for project preparation as well as kickstarting initiatives such as access to clean cooking.

Clean Cooking

The OPEC Fund signed its first US$35 million clean cooking loan in favor of the SMART Clean Cooking Project in Madagascar. The funding will support the provision of non-polluting equipment in a country where only 1.6 percent of the population has access to clean fuels. The OPEC Fund also published its first Clean Cooking Report in 2024, analyzing obstacles to the proliferation of clean alternatives and examining ways to overcome them.

01 | THE HIGHLIGHTS – AT A GLANCE

Knowledge Sharing

The OPEC Fund hosted its inaugural Climate Solutions Week with participants from ADB, IAEA, IIASA, IRENA, OECD, UNIDO, World Bank and many more. The event also included the first partner forum of the ADB/OPEC Fund Nature Solutions Finance Hub. Following its participation in the UN Climate Change Conference COP29, the OPEC Fund invited experts to a first Public Sector Knowledge Series event on “Digital Technologies to Improve Food Security Outcomes.”

Headquarters

The OPEC Fund marked the official inauguration of its expanded Headquarters at the adjacent Palais Colloredo-Mannsfeld on Vienna’s Ringstrasse on June 26, 2024. The OPEC Fund acquired and comprehensively renovated the historic building to accommodate its growing operations.

Awards

The Kom Ombo solar power plant, co-financed by the OPEC Fund, won the IJ Global "Energy Transition Deal of the Year” award. Constructed by the Saudi developer ACWA Power, Kom Ombo is the largest private solar power plant in Egypt, generating 200 MW of clean energy. The OPEC Fund awarded its latest Annual Award for Development to Dhaka Ahsania Mission, a non- governmental organization supporting women and smallholder farmers across Bangladesh, in a ceremony at its Headquarters in April.

01 | THE HIGHLIGHTS – FOREWORD BY THE PRESIDENT

FOREWORD BY THE PRESIDENT

wider policy and regulatory frameworks, represented the largest segment of institutional funding in 2024.

The OPEC Fund for International Development looks back on 2024 as another eventful year, marked by economic uncertainty and geopolitical instability — amid the deep- ening effects of climate change. Despite the challenging global environment, our insti- tution rose to the occasion and delivered record results with US$2.3 billion in new commitments across more than 70 projects, representing a year-on-year increase of 35 percent. Behind these statistics lie countless human stories of how the OPEC Fund is improving the lives of vulnerable people all around the world. For example:

The success of a project can no longer be measured without due reference to its environmental, social and governance impact. With the introduction of sustainabil- ity-linked loans in 2024, the OPEC Fund for the first time deployed an instrument that matches loan conditions with fulfilment of pre-agreed environmental, social and govern- ance (ESG) criteria and impact targets.

Forged in partnership with peer development finance institutions and the private sector, this conditionality creates a win-win for all.

In 2024, the OPEC Fund marked the 25th anniversary of its private sector window, which is spearheading the delivery of innovative finance. One example is the first syndication that enabled a financial institution from an OPEC Fund member country to provide support to a partner country economy. Institutional partnerships — in various forms — have long been key to the OPEC Fund’s success. A co-financing agreement signed with the World Bank Group in October 2024 marked a milestone in making project design and implementation faster and more cost-effective through increased cooperation at all stages to guarantee the best use of shareholders’ and investors’ financial resources. In a historic first, the OPEC Fund and the Inter-American Development Bank (IDB) executed an exposure exchange agreement. The OPEC Fund deepened its cooperation with partners via knowledge sharing and by attending key international events — including the UN Climate Change Conference (COP29) and the UN Conference to Combat Desertification (COP16) — and by hosting events like the annual OPEC Fund Development Forum, the inaugural

• A US$20 million loan to Malawi is boosting agriculture and food security for more than 100,000 people,

• a US$10 million loan for micro and small businesses in the Dominican Republic is kickstarting the local economy,

• a landmark 1.1 GW wind farm in Egypt and the largest onshore facility in Africa, co-financed by the OPEC Fund with a US$40 million loan, will provide clean energy to more than a million local households. The OPEC Fund has a long and successful track record in delivering cost-effective and impactful projects. Through its Climate Action Plan and Food Security Action Plan, the insti- tution has addressed the most pressing global issues, while continuing to finance long-term development solutions. In response to our partners’ needs, we are increasingly combining project financing with creating and fostering environments in which projects can succeed. That is why policy-based lending, which embeds individual projects in

01 | THE HIGHLIGHTS – FOREWORD BY THE PRESIDENT

Climate Solutions Week and the first Knowledge Series Public Sector conference.

At COP16 the OPEC Fund pledged US$1 billion for the fight against land degradation and desertification as part of a US$10 billion commitment by the Arab Coordination Group, a key development partner in South-South coop- eration with the OPEC Fund as a catalyst for mobilizing funding. We continue the implementation of our long-term strategy — the Strategic Framework 2030 — which was reviewed and updated in 2024. This mid-term review provided a valuable opportunity to sharpen our strategic focus and ensure that our efforts remain aligned with the evolving needs of our partner countries. As a result, we have reaffirmed and refined our three core strategic objectives:

• promoting sustainable development through South- South collaboration,

• driving climate innovation and a Just Transition, and

• building resilient and equitable societies.

To translate these objectives into action, the OPEC Fund is committed to providing US$20 billion in total financing commitments between 2025 and 2030. With the steadfast support of our member countries and the dedication of our team, we are confident in our ability to accelerate impact, drive meaningful change and enhance the well-being of people around the world.

ABDULHAMID ALKHALIFA President, OPEC Fund

01 | THE HIGHLIGHTS – RESULTS

RESULTS

Coming of age The OPEC Fund attains record results and sets the bar higher still

for on-lending to small businesses in its partner country Paraguay. The enhanced access to finance will particularly benefit women-led enterprises. The regional distribution of the OPEC Fund’s financing in 2024 saw the Middle East, North Africa, Europe and Central Asia narrowly ahead with 39 percent of total commitments, followed by Sub-Saharan Africa (34 percent), Asia and the Pacific (13 percent), and Latin America and the Caribbean (11 percent). The signing of Country Partnership Frameworks with the Central Asian republics Kazakhstan, Turkmenistan and Uzbekistan made for a significant increase in new loans across multiple sectors. 39+34+13+11+3+ H % 11 3 39 34 13 Asia and the Pacific Latin America and the Caribbean Multiregional Middle East, North Africa, Europe and Central Asia Sub-Saharan Africa Figure 1: Regional distribution of the OPEC Fund’s US$2.3 bn financing in 2024

For a second year in a row, the OPEC Fund for Inter- national Development reported record results in 2024 with strong increases in terms of new financing and new projects. Total new commitments rose to US$2.3 billion, a 35 percent increase year-on-year, across more than 70 projects, itself a 40 percent increase over 2023. New commitments in 2024 supported each of the OPEC Fund’s focus areas: climate action, food security, infra- structure development, the energy transition, digital connectivity and the creation of economic opportunities for sound growth and sustainable development. The largest segment of last year’s funding was poli- cy-based lending (19 percent), supporting govern- ment-led sustainable development programs and policy implementation to create an environment that attracts investors and allows projects to thrive. One example was a US$100 million loan to increase the competitiveness and resilience of Moroccan companies in the face of climate change. In 2024, the OPEC Fund also added sustainability-linked financing to its offering and signed a US$40 million loan to the African agricultural commodity trader ETC Group together with partners. The financing instrument ties lending terms to pre-agreed ESG impact targets for mutual benefit. The OPEC Fund also succeeded in attracting Commercial Bank of Dubai, a financial institution from its member country United Arab Emirates, to join the syndication of a US$50 million loan provided to Banco Commercial

01 | THE HIGHLIGHTS – RESULTS

US$ 261 MN The OPEC Fund tripled its agriculture commitments to with a strategic priority to boost global food security

These included support for renewable energy projects, a key pillar of the OPEC Fund’s Climate Action Plan. Delivery of the initiative came in ahead of target with renewable projects representing almost 40 percent of the institution’s energy sector commitments in 2024. Climate action was a compo- nent of projects in all other sectors as well, with particularly strong contributions from financial institutions and transport. In 2024, the OPEC Fund broke ground in new areas of engagement. A first project loan was signed with the Kingdom of Bhutan, providing US$50 million in financing to the Begana and Gamri hydropower project. Another premiere in an eventful year was the first loan signing with Montenegro, which dedicated ¤50 million to strength- ening fiscal sustainability and the green transition of this southeast European country. In other sectors, the OPEC Fund tripled its agriculture commitments to US$261 million compared to 2023, in line with its strategic priority to boost global food security. To

support sustainable and climate resilient infrastructure, significant funding (12 percent) was delivered to enhance connectivity in the transport sector. In the financial sector, the OPEC Fund allocated more than US$270 million to partner with governments and local banks for on-lending to small and medium-sized enterprises, driving job creation and enhancing access to finance. Elsewhere, the OPEC Fund allocated more than US$375 million to trade finance activities that ensured sustainable supplies of agriculture products and supported energy security and resilience. Building on these strong foundations and responding to high global demand for development financing, the OPEC Fund has set itself ambitious targets. Over the 2025-2030 period, the institution will target total financing commit- ments of US$20 billion to partner countries. This means delivering almost as much financing in six years as during the previous 45.

01 | THE HIGHLIGHTS – STRATEGY UPDATE

STRATEGY UPDATE

Expanding ambitions: The OPEC Fund sharpens its strategic vision Scaling up for greater impact

Scaling up for greater impact

In 2024, the OPEC Fund reviewed and refined its strategic direction to better align with evolving global challenges and the needs of its partners. This update builds on the institution’s commitment to supporting sustainable devel- opment and maximizing impact to help countries achieve the Sustainable Development Goals (SDGs).

With a strong foundation in place, the OPEC Fund is now scaling up further to maximize its impact. Between 2025 and 2030, the OPEC Fund aims to:

• provide US$20 billion in total financing commitments to partner countries,

Strengthening our foundations and expanding our reach

• approve at least US$5 billion in climate finance,

The OPEC Fund launched its Strategic Framework 2030 (SF2030) in 2019. Designed to enhance its development impact worldwide, SF2030 has guided the OPEC Fund in strengthening its institutional capacity, enhancing internal systems and diversifying funding sources. Securing access to capital markets proved a key milestone, which has ensured the OPEC Fund’s financial flexibility and its ability to scale up investments. Building on this foundation, the OPEC Fund significantly expanded its offering to partner countries. The institution increased its product offering, stepped up its engagement and launched dedicated thematic initiatives such as the Climate Action Plan and Food Security Action Plan to address urgent global challenges.

• invest US$2 billion in food security initiatives and

• allocate at least US$4 billion in financing to Africa to address the continent’s critical development challenges.

This expansion translated into tangible results: annual commitments grew from US$1.1 billion in 2019 to US$2.3 billion in 2024.

Between 2025 and 2030, the OPEC Fund aims to approve at least

US$ 5 billion

in climate finance

01 | THE HIGHLIGHTS – STRATEGY UPDATE

Strategic priorities 2025-2030

players, the OPEC Fund aims to maximize impact and scale up South-South cooperation.

The OPEC Fund’s refined strategy is built on three core objectives that reflect global and partner country priori- ties alike:

Delivering meaningful development outcomes

While financial commitments are important, the OPEC Fund is committed to ensuring that development effec- tiveness remains central to its operations. An updated results framework will be implemented to measure impact, track progress and enhance accountability. With a sharper strategic focus, increased financial capacity and a commitment to results-driven interven- tions, the OPEC Fund is well-positioned to play an even greater role in supporting sustainable development and driving transformational change in the years ahead.

1. Promoting Sustainable Development through South- South Collaboration

2. Driving Climate Innovation and a Just Transition

3. Building Resilient and Equitable Societies

To translate these objectives into action, the OPEC Fund will continue to focus on infrastructure development, human capital investment and institutional capacity building, while strengthening the private sector as a driver of economic growth. These efforts will be complemented by a strong emphasis on climate action and food secu- rity, reinforcing the OPEC Fund’s role in delivering global public goods.

Mobilizing resources and strengthening partnerships

To achieve its ambitious goals, the OPEC Fund will enhance its ability to mobilize additional resources through multiple channels, including:

• expanding trust funds and syndication activities,

• strengthening co-financing partnerships and

• leveraging its market access to raise funds efficiently.

Partnerships will remain at the heart of the OPEC Fund’s operations. By collaborating with multilateral devel- opment banks, bilateral institutions and private sector

01 | THE HIGHLIGHTS – DEVELOPMENT EFFECTIVENESS

DEVELOPMENT EFFECTIVENESS

Delivering impact around the world With its financing the OPEC Fund aims to improve lives — measurably

SDG 7 – Affordable and Clean Energy has long been a focus of the OPEC Fund, as reliable and sustainable access to energy is a key enabler for development. Among others, the OPEC Fund is co-financing, with a US$50 million loan provided alongside the European Bank for Reconstruction and Development (EBRD), a 240 MW wind farm project in Azerbaijan. The Absheron-Khizi plant is the first independent wind power project with international investment in Azerbaijan — and the largest in the Caucasus region. The project is set to provide the country with renewable energy while avoiding 400,000 tons of carbon emissions annually. Analyzing the outcomes of OPEC Fund projects that were completed or reached early operational maturity from July 2023 to June 2024, with a total volume of US$867 million in OPEC Fund commitments, the report finds that these operations delivered significant develop- ment impact across Africa, Asia, Latin America and the Caribbean ( Figure 2 ). The OPEC Fund Results Framework will continue to guide the institution toward development effectiveness. Its application provides important inputs to inform lending decisions and project design to facilitate improved outcomes for vulnerable communities worldwide. The OPEC Fund Development Effectiveness Report provides a detailed account of how the institution lives up to its mandate to deliver impact. In doing so it enhances the transparency and accountability of the OPEC Fund’s work vis-à-vis its member and partner countries. The report makes an important contribution to the OPEC Fund’s goal of continuous improvement and reaffirms its commitment to sustainable development.

The work of development finance institutions delivers results for people in many ways. Infrastructure invest- ments provide people with access to services and create markets, policy support reshapes legal and regulatory frameworks for improving people’s lives, while boosting financial intermediation enables entrepreneurship and economic growth. The OPEC Fund is dedicated to the delivery of the Sustainable Development Goals (SDGs). In order to maximize development impact, the institution has devel- oped a range of tools to review, measure and guide its work. Reporting is an essential part of this process, as captured in the third annual Development Effectiveness Report. The most recent review examined 45 approved OPEC Fund projects and 31 completed projects for the period of July 2023 to June 2024. The review found that all approved projects contribute to at least one SDG, while over 90 percent support two or more goals. The largest share of projects feeds into SDG 8 – Decent Work and Economic Growth, testament to the importance of economic development, especially at a time of uncer- tainty and feeble growth. Numerous examples illustrate the impact of OPEC Fund projects. Under SDG 1 – No Poverty the institu- tion approved a US$50 million loan for a project in Tanzania to boost the sustainability and profitability of the dairy sector, seeking to cut poverty among 120,000 people. Another key focus area, SDG 2 – Zero Hunger, was served with a US$15 million loan for a project in Zimbabwe supporting horticultural production and sales by smallholder farmers.

01 | THE HIGHLIGHTS – DEVELOPMENT EFFECTIVENESS

Figure 2: OPEC Fund project outcomes

US$ 553 MN

75,868

37,914

households with new or improved energy connections 300,000

farmers supported

in trade facilitated

people trained

households with improved water access 3,040

269,910 ha

34,678

micro, small and medium-sized enterprises financed 1,249

of land improved

women empowered

energy capacity installed or refurbished (92 MW of which renewable) 180 MW

2 emissions reduced annually 73,344 t

505 km

of roads built or rehabilitated

01 | THE HIGHLIGHTS – CLIMATE FINANCE

CLIMATE FINANCE

Climate finance that makes a difference The OPEC Fund exceeds its ambitious targets in support of the Paris Agreement

The year 2024 was the hottest in history, reaching a record 1.55°C above pre-industrial temperatures. The OPEC Fund responded to the growing dangers associated with climate change by further stepping up its efforts in climate mitigation and adaptation with a combination of project financing, policy reform and technical assistance. In 2024, the OPEC Fund published its first Climate Finance Report, show- casing achievements, case studies and progress toward climate goals. While the institution’s Climate Action Plan initially set a target for a quarter of all new financing to be climate-focused by 2025, the OPEC Fund has already surpassed this — achieving 34 percent in 2023. The report marked the begin- ning of the institution's annual climate finance reporting. Climate action was delivered through a range of vehicles and sectors. The annual review of the impact of the OPEC Fund’s projects in its Development Effectiveness Report found that 51 percent of the 45 approved projects and 16 completed projects from July 2023 to June 2024 contributed to Sustainable Development Goal 13 – Climate Action. Measurable impact included the reduc- tion of CO 2 emissions by almost 75,000 tons per year. The OPEC Fund significantly increased its investments in renewable energy projects, which constituted nearly 40 percent of the institution’s energy sector commitments in 2024. One example was the landmark 1.1 GW Suez Wind Farm, which will power more than a million homes and cut CO 2 emissions by 2.5 million tons per year. To find effective strategies against climate change it is also important to join forces in knowledge sharing and developing joint approaches. In April 2024, the OPEC Fund hosted its inaugural Climate Solutions Week, convening experts from partner organizations, developing countries and the private sector. The event facilitated both high-level policy discussions and in-depth technical exchanges, reinforcing the OPEC Fund’s role as a key platform for climate dialogue and action.

Investments in renewable energy projects constituted nearly

40 %

of the energy sector commitments in 2024

01 | THE HIGHLIGHTS – CLIMATE FINANCE

Climate Solutions Week also included a first partnership forum with the goal of mobilizing

Climate Solutions Week also included a first partnership forum of the Nature Solutions Finance Hub together with the Asian Development Bank (ADB). This joint facility was established in 2023 with the goal of mobilizing US$2 billion to conserve nature and fight biodiversity loss in the Asia and Pacific region. The platform goes beyond financing and involves partners such as Agence française de développement (AFD), European Union (EU), Green Climate Fund (GCF), Global Environment Facility (GEF), Deutsche Gesellschaft für Interna- tionale Zusammenarbeit (GIZ) and the UK government. Strengthening its partnership network to maximize impact, the OPEC Fund also joined the Energy Transition Accelerator Financing (ETAF) platform of the International Renewable Energy Agency (IRENA), a global initiative that seeks to mobilize funds for renewable energy investments. To date, the platform has attracted more than US$4 billion in pledges to support the energy transition. Addressing another urgent environmental issue, the OPEC Fund launched a new Island Resilience Facility at its 2024 Development Forum in Vienna. The initiative underscores the OPEC Fund’s commitment to supporting Small Island Developing States (SIDS) in addressing climate change and strength- ening resilience. The first workshops and projects have already been rolled out in the Eastern Caribbean and Pacific regions, with further expansions set for the Indian Ocean and the broader Caribbean community. Recognizing the critical nexus between climate, land and biodiversity, the OPEC Fund actively engaged in the UN Conference to Combat Desertification (COP16) in Riyadh in December 2024. The OPEC Fund committed US$1 billion as part of a US$10 billion pledge by the Arab Coordination Group in support of the Riyadh Global Drought Resilience Partnership. The initiative will finance large-scale land restoration and drought preparedness in 80 of the world’s most vulnerable countries, helping them build their resilience and capacity to respond. The OPEC Fund also conducted Land Degradation Neutrality (LDN) assess- ments across its portfolio. This groundwork informs a new commitment to increasing investment in LDN and sustainable land management through 2030.

US$ 2 BN

to conserve nature and fight biodiversity loss

01 | THE HIGHLIGHTS – INNOVATIVE FINANCING

INNOVATIVE FINANCING

New approaches to financing First OPEC Fund syndication is followed by introduction of sustainability-linked loans

systems and supporting the livelihoods of more than 600,000 smallholder farmers across Sub-Saharan Africa.

One of the goals of the OPEC Fund’s Strategic Frame- work 2030 is the development and introduction of new products and services in close alignment with the devel- opment needs of its partner countries. The provision of financing has been expanded not only quantitatively, but also with the introduction of new instruments in 2024, which complement the OPEC Fund’s offering in key areas. The first syndication arranged by the OPEC Fund as sole Bookrunner, Mandated Lead Arranger and Facility Agent serves as an example. The loan attracted a commercial bank from a member country, Commercial Bank of Dubai from the United Arab Emirates, to provide financing to a bank in a partner country, Banco Continental in Paraguay, to boost the local economy. The syndication is structured as an A/B facility, with the OPEC Fund providing US$25 million as A-lender and Commercial Bank of Dubai contributing another US$25 million as B-lender. Banco Continental as borrower will act as a financial intermediary, facilitating access to finance for small and medium-sized enterprises and the agricul- ture sector. Strengthening these pillars of the Paraguayan economy is set to kickstart growth. A further innovation in 2024 for the OPEC Fund was the signing of its first sustainability-linked loans, integrating sustainability into its financing tools. The OPEC Fund provided a US$14 million financing as part of a US$120 million facility to help the Cocoa Touton Processing Company Ghana enhance sustainable sourcing and resil- ience for over 60,000 smallholder farmers. In a second transaction, the OPEC Fund contributed a US$40 million loan to a US$394 million package to ETC Group (ETG), one of Africa’s largest agricultural commodity supply chain managers, strengthening food

A sustainability-linked loan ties financing terms such as pricing to a borrower’s ability to meet pre-agreed sustainability and impact targets. According to the authoritative guidelines by the Loan Market Association these are the following: Energy efficiency, greenhouse gas emissions, renewable energy, water consump- tion, affordable housing, sustainable sourcing, circular economy, sustainable farming and food, biodiversity and global ESG assessments. Sustainability-linked loans embed sustainability into the financing structure, directly incentivizing companies to deliver measurable outcomes. For example, a company might commit to reducing greenhouse gas emissions from 2 tons of CO 2 to 1 ton within five years. If this is achieved, the loan terms become more favorable. Regular reporting on sustainability performance fosters greater accounta- bility, improving investors’ confidence and encouraging robust governance mechanisms. For the OPEC Fund the ETG sustainability-linked loan was also an opportunity to demonstrate its commitment to support private sector engagement for sustainable development. ETG committed to reducing greenhouse gas emissions, improving energy efficiency and expanding gender-inclusive programs for farmers. On a wider scale the loan is part of the OPEC Fund’s strategy to introduce financial products that address emerging challenges and support sustainable develop- ment. The sustainability-linked loan is both a milestone that highlights the growing focus on integrating sustaina- bility into private sector operations and a stepping stone to new operations in this area.

01 | THE HIGHLIGHTS – INNOVATIVE FINANCING

01 | THE HIGHLIGHTS – SUSTAINABLE DEVELOPMENT GOALS

SUSTAINABLE DEVELOPMENT GOALS

The first SDG Bond Impact Report Building a better and bigger multilateral development bank

4. Access to Essential Services and Affordable Basic Infra- structure: SDG 1 - No Poverty, SDG 6 - Clean Water and Sanitation, SDG 7 - Affordable and Clean Energy, SDG 9 - Industry, Innovation and Infrastructure and SDG 11 - Sustainable Cities and Communities

In 2019, the OPEC Fund started a transformation with the adoption of its Strategic Framework 2030, designed to enhance development support by growing and expanding its operations. Key to expanding operations was a diversi- fication of the sources of funding of the Ordinary Capital Resources (OCR) to include the international capital markets. OCR are primarily used for lending to middle-in- come countries, selected less-developed countries and private sector borrowers. After detailed preparation the OPEC Fund issued its inaugural benchmark bond in January 2023, raising US$1 billion to finance or refinance eligible loans furthering the Sustainable Development Goals (SDGs) under a dedicated SDG Bond Framework. The impact of the projects financed by bonds issued under this framework was published in the first SDG Bond Impact Report in 2024. The SDG Bond Framework — benefitting from a Second Party Opinion from the specialized sustainability rating agency Sustainalytics — incorporates five social catego- ries and one green category. These categories represent many of the pressing needs of the OPEC Fund partner countries and comprise:

5. Employment Generation and Socio-economic Advancement and Empowerment: SDG 1 - No Poverty and SDG 8 – Decent Work and Economic Growth

6. Renewable Energy: SDG 7 - Affordable and Clean Energy and SDG 13 - Climate Action.

Eligible projects are selected by a multidisciplinary internal committee. The net proceeds of the bonds issued under the framework are managed through a disburse- ment approach and should be fully allocated to eligible SDG loans within 36 months of each bond issuance. Reporting to investors takes place annually and the allo- cation of eligible assets is verified by an external inde- pendent party. For the 2024 report this service was also provided by Sustainalytics. The first SDG Bond Impact Report shows that by December 31, 2023, US$862.13 million of the proceeds of the US$1 billion bond had been allocated to fund eligible SDG loans. In total, 57 eligible SDG loans were selected for funding from the bond proceeds, of which 34 projects were completely disbursed and 23 were ongoing. While 86.2 percent of the proceeds were assigned to refi- nancing projects, 13.8 percent will be assigned to new disbursements of the 23 ongoing projects. The pending amount of US$137.87 million is set to be disbursed by January 2026 at the latest.

1. Access to Essential Services and Food Security: SDG 1 - No Poverty and SDG 2 - Zero Hunger

2. Access to Essential Services: Health and Affordable Basic Infrastructure: SDG 3 - Good Health and Well-Being

3. Access to Essential Services: Education, SDG 4 - Quality Education

01 | THE HIGHLIGHTS – SUSTAINABLE DEVELOPMENT GOALS

attracted 47 percent of proceeds allocated to eligible loans, followed by category 5 with 20 percent, category 1 with 14 percent, category 3 with 9 percent, category 2 with 6 percent and category 6 with 4 percent. Translated into concrete results under its SDG Bond Framework, the OPEC Fund financed, among others, 61,880 hectares of farmland improvements, 26,207 km of installed or rehabilitated electricity transmission lines, 237,445 square meters of new or improved educational facilities and 312 MW of installed generation capacity of renewable energy facilities. Overall, more than 32 million people benefitted across the social categories.

In terms of geographical distribution, 37 percent of proceeds assigned to 57 SDG loans went to Latin America and the Caribbean, 34.2 percent to Africa and 28.8 to Asia, reaching from Argentina to Viet Nam and from Morocco to Eswatini ( Figure 3 ). For example: In Jordan the OPEC Fund supported a solar power plant to accelerate the diversification of energy supply (SDG 7 and 13), in Papua New Guinea a loan strengthened healthcare infrastructure (SDG 3) and in Paraguay small businesses benefitted from improved access to finance (SDGs 1 and 8).

Broken down by the categories set out in the third para- graph above, the following picture emerged: Category 4

37+ 34+29+ H % 37 34 29

Figure 3: Regional distribution of the 57 SDG loans

Figure 4: Allocation of 57 SDG loans

Latin America and the Caribbean

SDG 1 - No Poverty

25%

Asia

SDG 7 - Affordable and Clean Energy

14%

SDG 8 - Economic Growth

14%

SDG 9 - Industry, Innovation and Infrastructure

13%

SDG 6 - Clean Water and Sanitation

10%

SDG 2 - Zero Hunger

10%

SDG 4 - Quality Education

SDG 3 - Good Health and Well-Being

SDG 13 - Climate Action

Africa

+ + + + + + + +

01 | THE HIGHLIGHTS – PARTNERSHIPS

PARTNERSHIPS

Deepening partnerships to combine forces The OPEC Fund concludes landmark agreements with the World Bank Group and the Inter-American Development Bank

The agreements, signed by OPEC Fund President Abdul- hamid Alkhalifa and World Bank Group President Ajay Banga, provide the basis for increasing cooperation in areas such as climate-friendly energy technologies, food security and regional infrastructure projects. Both insti- tutions reiterated their commitment to fostering regional cooperation and connectivity. Setting a new benchmark among multilateral devel- opment banks (MDBs) and supranational entities, the OPEC Fund and Inter-American Development Bank (IDB) executed an exposure exchange agreement (EEA) in April 2024 through a “synthetic” exchange of credit-risk expo- sure. This was the first time that the EEA instrument had been used beyond triple-A-rated MDBs. The OPEC Fund’s current rating is AA+ (December 2024).

In October 2024, the OPEC Fund and the World Bank Group signed a Memorandum of Understanding and a Co-Financing Agreement to enhance cooperation on key global development challenges and boost efficiencies in project implementation. The World Bank has traditionally been the OPEC Fund’s largest co-financing partner, with more than 230 projects by end-2024 for a total investment volume of US$38 billion in multiple sectors across the world. Building on this sound foundation, the Co-Financing Agreement marks an important step forward in delivering impactful and cost-effective projects through closer coor- dination during the appraisal, co-financing and implemen- tation of projects. More efficient preparatory work is likely to accelerate delivery.

OPEC Fund President Alkhalifa and World Bank Group President

IRENA Director-General La Camera and OPEC Fund President

Banga in Washington, DC, October 28, 2024

Alkhalifa confirming further cooperation

01 | THE HIGHLIGHTS – PARTNERSHIPS

The World Bank has traditionally been the OPEC Fund’s largest co-financing partner, with more than

230 projects

by end-2024

Saharan Africa, with the WFP as the lead technical partner and a crucial role in project design, technical review and implementation. Additionally, the OPEC Fund joined the Energy Transition Accelerator Financing (ETAF) platform of the Interna- tional Renewable Energy Agency (IRENA), a global initi- ative that seeks to mobilize funds for renewable energy investments. The platform is mobilizing capital to scale up the financing of renewable energy technologies to 5 GW by 2030. The OPEC Fund’s partners in ETAF include the African Development Bank (AfDB), Asian Infrastructure Investment Bank (AIIB), European Bank for Reconstruc- tion and Development (EBRD), International Finance Corporation (IFC), Islamic Development Bank (IsDB) and private sector investors such as Masdar, the UAE clean energy developer, HSBC, a British bank, and the insurance company Swiss Re.

The agreement marked a milestone in the OPEC Fund’s efforts to improve its portfolio diversification, strengthen its financial resilience and increase its lending capacity. It follows the recommendations of the G20-sponsored Independent Review of MDBs’ Capital Adequacy Frame- works. The review calls on MDBs to expand their capital markets activities by - among others - leveraging their risk-taking capacity to boost lending by US$200 billion over the next decade. Partnerships also matter in addressing key development challenges such as climate change and food security. The OPEC Fund spearheaded the Food Security and Climate Adaptation Facility in 2024 in partnership with the UN World Food Programme (WFP), the International Fund for Agricultural Development (IFAD) and other partners with the goal of mobilizing US$500 million in investments by 2030. The facility will kick-off with pilot initiatives in Sub–

Cindy McCain, Executive Director of the World Food Programme

IFAD President Lario and OPEC Fund President Alkhalifa joined

(WFP), in Vienna, June 25, 2024

forces with WFP in fighting hunger in the world

01 | THE HIGHLIGHTS – KNOWLEDGE

KNOWLEDGE

Sharing knowledge, transforming lives OPEC Fund launches new series with Clean Cooking report and Public Sector event

The OPEC Fund’s transformation under Strategic Framework 2030 is not just about significantly expanding its lending operations. It also involves trans- forming into a knowledge bank, intensifying cooperation with partners based on the development needs of partner countries. In response to the multitude of challenges that countries are facing as they develop, urgent and effective solutions are needed. Financing is important, but financing alone is not a panacea, and knowledge is key to make best possible use of scarce resources. Addressing this challenge, the OPEC Fund launched in 2024 its Public Sector Knowledge Series. The program is dedicated to examining “innovation in development finance operations” given innovation’s crucial role in driving long-term economic growth. The series aims to explore innovation systems and facilitate their application. Leveraging its network of international partners in government, business, academia and civic society, the OPEC Fund convened the inaugural event in November 2024. Senior participants from a wide range of partner organiza- tions deliberated on the topic “Digital Technologies to Improve Food Security Outcomes.” Supporting sustainable agriculture has been a priority for the OPEC Fund since inception in 1976. To date, the institution has committed more than US$2.6 billion to agriculture projects, representing some 10 percent of its total operations. Speakers at the event agreed that the range of possibilities offered by tech- nology and innovation is wide: From precision agriculture to artificial intelli- gence, digital tools hold immense potential. However, the adoption in devel- oping economies is hampered by the digital divide, which requires significant public investments, an improved policy environment as well as adequate financing models and incentive frameworks. The findings of the event and derived action items will be published in 2025. Following the successful launch, the Public Sector Knowledge Series will continue in 2025 with a focus on themes strongly linked to the OPEC Fund's operational priorities.

The first OPEC Fund Knowledge

Series Clean Cooking Report was

launched at the UN Conference to

Combat Desertification (COP16)

in December 2024 in Riyadh,

Saudi Arabia

01 | THE HIGHLIGHTS – KNOWLEDGE

As a second pillar, the Knowledge Series also comprises a specialized annual publication dedicated to a highly topical issue with relevance for the devel- opment community. The OPEC Fund chose to launch the program with a Clean Cooking Report, presented at the UN Conference to Combat Deserti- fication (COP16) in December 2024. This report builds on work by the OPEC Fund and its partners under the Climate Finance and Energy Innovation Hub launched in 2022, as well as of the clean cooking workshop and panel discus- sions held during the Climate Solutions Week in April 2024. These initiatives aimed to share knowledge and best practices to advance universal access to clean cooking. More than two billion people worldwide rely for their daily cooking on tradi- tional, yet polluting, fuels such as kerosene, wood and charcoal. Traditional cooking methods contribute to some 3.7 million premature deaths annually, with women and children affected the most. Meanwhile, the use of biomass for cooking is a major driver of deforestation and environmental degradation. Alternatives such as electric, liquefied petroleum gas and biogas cookstoves exist. Yet they face several barriers to succeed in the market as the report shows. Foremost among them are affordability, sociocultural factors and fuel stacking, whereby households retain traditional methods alongside newer clean cooking solutions. The OPEC Fund is complementing the findings with practical solutions on the ground. A landmark US$35 million loan will support the SMART Clean Cooking Project in Madagascar, where today just 1.6 percent of the population has access to non-polluting fuels. Similar projects in Africa and Asia are under preparation and will be submitted to the Governing Board throughout 2025.

US$ 35 MN A landmark loan will support the SMART Clean Cooking Project in Madagascar

01 | THE HIGHLIGHTS – PRIVATE SECTOR

PRIVATE SECTOR

Powerhouse Private Sector OPEC Fund celebrates 25th anniversary of working in and with the sector

with a rise in interest rates, soaring inflation and currency fluctuations and the OPEC Fund Private Sector window works closely with its partners to navigate this dynamic landscape. The private sector is also the driving force behind global trade — and so it was a logical next step for the OPEC Fund to launch a trade finance window in 2006. This has been another huge success, providing economies with essential imports while facilitating crucial exports. Trade is recognized as an engine of growth and by end-2024 the OPEC Fund had provided over 11,000 unfunded guaran- tees globally for over US$12 billion in trade finance. The 25th anniversary was also a welcome opportunity to renew and deepen existing partnerships as well as forging new alliances. At an OPEC Fund-hosted roundtable Vice President, Private Sector Tareq Alnassar was joined by Marco Arcelli, CEO, ACWA Power; Gabriel Azevedo, Chief Strategy Officer, IDB Invest; Hela Cheikhrouhou, Vice President, Middle East, Central Asia, Türkiye, Afghanistan and Pakistan, International Finance Corporation (IFC); Suzanne Gaboury, Director General, Private Sector Oper- ations, Asian Development Bank (ADB); Sanjeev Gupta, Board Member and Executive Director Financial Services, Africa Finance Corporation (AFC); Saif Malik, CEO for UK and Regional Head of Client Coverage for the UK and Türkiye, Standard Chartered Bank; and Admassu Tadesse, Group President and Managing Director, Trade and Development Bank (TDB).

Late June 2024 marked a quarter century since the start of the OPEC Fund’s private sector operations. Initially focused on the public sector, the development finance institution launched its first private sector operations in 1999. Today they account for 30 percent of total commit- ments, supporting the delivery of the OPEC Fund’s devel- opment mandate. The OPEC Fund approach aims to maximize development impact by providing comprehensive and complemen- tary support. While the public sector traditionally takes the lead in building the infrastructure for a successful economy, it is the private sector that drives growth. Both are indispensable for sound development. Starting with an initial budget of US$250 million for a five-year period, the OPEC Fund’s private sector engage- ment has grown dynamically in volume and number of operations over the years. To date, the OPEC Fund Private Sector has committed more than US$10 billion to over 600 transactions across multiple sectors in more than 70 countries worldwide. Financing solutions need to be adaptable and innovative to serve the private sector’s needs. There is a focus on sectors closely aligned with the OPEC Fund’s mandate and delivery of the Sustainable Development Goals. This includes the financial sector, infrastructure and agribusi- ness, among others. The business landscape changes frequently and has shifted substantially in the recent past

Collaborate for impact PRIVATE SECTOR 25 YEARS

01 | THE HIGHLIGHTS – PRIVATE SECTOR

THE RESULTS 02

02 | THE RESULTS – OPERATIONAL HIGHLIGHTS

OPERATIONAL HIGHLIGHTS (IN US$MN)

By commitments (agreements signed during 2024)

2024

2023

2022

2021

2020

Since inception

By source

OCR

1,869

1,379

1,415

1,280

1,203

27,082

SCR

439

313

225

203

387

1,597

Grants

667

By category

Sovereign

1,731

1,293

1,228

874

1,145

21,731

Non-Sovereign

577

398

412

609

445

6,899

Grants

667

Sovereign operations

By sector

Agriculture

221

220

161

2,715

Education

104

1,207

Energy

235

2,962

Health

815

Policy-based Lending

437

532

435

1,404

Trade Finance

190

193

249

137

235

2,740

Transport & Storage 370

240

173

205

276

5,343

Water & Sanitation 30

114

1,543

Other

141

111

301

259

3,002

By region

ASP

215

220

266

225

272

4,757

ESA

339

226

175

4,005

LAC

185

280

143

3,176

MEC

745

226

469

201

368

5,165

WCA

246

341

251

203

332

4,674

ASP: Asia & the Pacific; ESA: Eastern & Southern Africa; LAC: Latin America & the Caribbean; MEC: Middle East, North Africa, Eastern Europe & Central Asia; WCA: West & Central Africa

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