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“Countries value MDBs because they combine
of respondents. It also points to gaps in capacity on the ground and limited grants for project preparation as major constraints to building strong project pipelines. This was recognized under the OPEC Fund’s Strategic Framework 2030. The institution understood that scaling up development finance would require stronger operational readiness, better pipelines and closer collaboration with partner institutions. That recognition informed the renewal of the grants window. Around 90 percent of OPEC Fund grant resources are now directed toward supporting operations, including project preparation. This allows grants to support feasibility studies, environmental and social work, technical design, procurement readiness and other activities that improve quality at entry. OFQ : The ODI report also highlights concerns around processing times. What conclusions should MDBs draw from that finding? AB: The numbers are clear. Seventy- nine percent of respondents said short processing times are very or extremely important. That does not mean all complexity can be removed. Many development operations, especially infrastructure projects, involve safeguards, procurement requirements, technical studies and multiple stakeholders. Some complexity is necessary to maximize development impact and protect stakeholders, including vulnerable communities. The issue is whether the system manages complexity efficiently. Better preparation, stronger coordination among financiers and earlier alignment
finance, technical expertise, policy dialogue, knowledge and convening power.”
Adebayo Babalola, Director, Strategic Planning, OPEC Fund
with government implementation arrangements can reduce delays. This is why project preparation and coordination are closely linked to operational effectiveness. OFQ : The MDB reform agenda focuses on balance sheets and capital adequacy. How does the OPEC Fund connect to that agenda? AB: Capital adequacy remains central because development financing needs are large and MDBs must have the capacity to respond. For the OPEC Fund, access to international capital markets was a major milestone. It strengthened the institution’s ability to scale long-term development finance and supported the implementation of the Strategic Framework 2030, which targets US$20 billion in new financing from 2025-2030. The reform agenda also encourages institutions to use capital more efficiently. Take the OPEC Fund’s Exposure Exchange Agreement with the Inter-American Development Bank, which enables both institutions to diversify portfolio exposure and create additional lending headroom through risk sharing. This type of instrument shows how cooperation among MDBs is evolving.
Institutions are working together not only at the project level, but also through financial mechanisms that strengthen development capacity. OFQ : How do strategic initiatives fit into this partnership-based model? AB: Strategic initiatives are another way of organizing partnerships around defined development challenges. Take our Food Security Action Plan, which allowed the OPEC Fund to respond to a global crisis with a dedicated financing commitment, while working alongside other partners. Mission 300 is another example of how development goals require coordinated action. The OPEC Fund’s participation supports the wider effort to expand electricity access in Sub-Saharan Africa by 2030. These initiatives show that partnerships can also provide a framework for sustained engagement around priority themes such as food security, energy access, climate resilience and economic stability – allowing institutions to move from single operations to combined delivery platforms. OFQ : What lessons should MDBs draw from these findings? AB: One lesson is that client countries value MDBs most when their different functions come together. A second is that visibility is built through operational relevance. A third is that partnership-based institutions can play an important role in the next phase of development finance. The future MDB landscape will not be defined by scale alone. It will also depend on the ability to connect partners, mobilize resources, prepare projects and deliver effectively.
ODI Global ODI Global is a global affairs think tank with offices in London, Brussels and Washington, DC. Founded in 1960 in London as the Overseas Development Institute, the organization researches global challenges, including the climate crisis, economic inequality, gender justice and geopolitical shifts. Its mission is “to translate rigorous, evidence-driven research into actionable strategies that promote a just, sustainable and resilient world.” https://odi.org/en/
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