The OPEC Fund for International Development OPEC FUND QUARTERLY 4 2026
Is water equity an achievable goal for the Global South? Liquid assets
WATER FORWARD Joining the World Bank’s new initiative
HEAT STRESS What the world can learn from high temperatures in Thailand
EL NIÑO 2026 This year’s ocean warming could be
especially disruptive
The OPEC Fund Quarterly is published four times a year by the OPEC Fund for International Development. The OPEC Fund works in cooperation with developing country partners and the international development community to stimulate economic growth and social progress in low- and middle-income countries around the world. The organization was established by the member countries of OPEC in 1976 with a distinct purpose: to drive development, strengthen communities and empower people. Views and opinions expressed by guest contributors are solely the authors’ and don’t reflect the opinions or beliefs of the OPEC Fund. The OPEC Fund Quarterly is available free. If you wish to be included on the digital distribution list, please contact us via opecfund.org . Back issues of the magazine can be found on our website. The contents of this publication do not necessarily reflect the official views of the OPEC Fund or its Member Countries. Any maps are for illustration purposes only and are not to be taken as accurate representations of borders. Editorial material may be freely reproduced, providing the OPEC Fund Quarterly is credited.
PUBLISHERS The OPEC Fund for International Development Parkring 8, A-1010 Vienna, Austria Tel: (+43-1) 51564-0 Fax: (+43-1) 51392-38 www.opecfund.org
EXECUTIVE EDITOR Nadia Benamara EDITOR Axel Reiserer EDITORIAL TEAM Angus Downie, Howard Hudson, Mohammad Mazraati, Axel Reiserer, Nicholas K. Smith PHOTOGRAPHS OPEC Fund for International Development (unless otherwise credited) PRODUCTION Iris Vittini Encarnacion DESIGN Robin Turton, More Tea Design Ltd PRINTED IN AUSTRIA Print Alliance HAV Produktions Gmbh This publication is printed on paper produced from responsibly managed forests. Front cover illustration: adehoidar/Shutterstock; Maman Suryaman/Shutterstock; Robin Turton, More Tea Design
CONTENTS
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OUR MAIN FEATURES Cover story The OPEC Fund at the forefront of global challenges
5-9 Three COPs, three existential challenges, one OPEC Fund 10-13 Interview OPEC Fund VP Strategy: “Our role is to help countries protect their development gains and invest in a more resilient future” 14-19 The OPEC Fund and Water Forward: For people, food and planet 20-22 What the world can learn from heat stress in Thailand 23-25 Mapping risk, building hope,
driving action: using spatial data to track climate risks 26-29 The 2026 El Niño: The potential to impact millions of lives 30-31 Earth-friendly Vienna: SDGs are everywhere, if you know where to look 32-33 Digital transformation beyond technology: Closing the capability gap behind the digital divide IN OTHER SECTIONS
Water for the world p 14-19
In the Field 34-35 The Philippines’ e-voucher program: Feeding the people, nourishing the economy
Development News 38-40 OPEC Fund projects supporting sustainable development Events 41-43
Review 44-45
How to Feed the World: The History and Future of Food : The complex world of food, agriculture and nutrition The Back Page 46
Spotlight 36-37 OPEC Fund Private Sector spearheads local currency lending, Islamic finance policy and new syndication projects
New Partnership Frameworks, the OPEC Fund at the International Atomic Energy Agency forum... and more
OPEC Fund-World Bank Knowledge Exchange Workshop: Results-based financing and artificial intelligence
EDITORIAL
FINDING OUR WAY, ANOTHER WAY
Dear Reader, “A horse knows the road, even if its rider does not,” goes an old Mongol proverb – a reminder that there are many kinds of knowledge, and that we should trust the intelligence and instincts of others, especially the local knowledge of partners, when travelling through unknown territory. In this edition, we hear from OPEC Fund Vice President, Strategy Musab Alomar who sets the scene and talks about our next phase of climate action. Having already surpassed our 40 percent of portfolio target, we delve into the complex world of climate risk and development finance. “Climate change, biodiversity loss, land degradation, water scarcity and development constraints do not occur in isolation. They reinforce one another, and our response therefore also needs to be integrated,” said Vice President Alomar (pages 10-13). As climate change transforms the skies above and the earth below, the OPEC Fund has been on the road, sharing and debating ideas at the latest UN Conference of the Parties (COP) meetings on desertification, biodiversity and climate change (pages 5-9). At the first of these meetings, Esther Penunia, Secretary General of the Asian Farmers Association, lamented the lack of a global drought agreement: “We cannot wait for COP18 for solutions.” The next conference is scheduled for 2028.
In our home city of Vienna, we venture off the beaten track for a walking tour inspired by the UN Sustainable Development Goals. Together we discover how the local authorities have long been ahead of their time, in climate and social terms, in creating one of the most “livable” cities in the world. We also take a look at a new report from the Asian Development Bank on the effects of heat stress in Thailand, where marine heat waves, made worse by El Niño, threaten two key sectors: agriculture and tourism. The report details what the country is doing to counteract these deadly temperatures as well as what other parts of the world are doing to beat the heat themselves (pages 20-22). Finally, we see how young scientists from the Middle East are overcoming their climate anxiety: using spatial data to track climate risk and inform decision-making (pages 23-25). A Geographic Information Systems specialist, Qamar Al-Mimi of Jordan, said: “Despite the challenges, I remain optimistic. Every project, whether it focuses on dust storms, floods, biodiversity or water scarcity, contributes to a greater understanding of the risks we face and the actions we can take.” We wish you an enjoyable (and perhaps even a hopeful) read.
We should trust the intelligence and instincts of others, especially the local knowledge of partners, when travelling through unknown territory.
A key development in 2026 has been the focus on water, beginning in April with the World Bank-led Water Forward initiative and culminating in December in the UN Water Conference in the United Arab Emirates. That’s reason enough for us to take a closer look at the OPEC Fund’s activities in this sector. We’re reviewing the results of decades of efforts and analyzing the lessons learned along the way. Looking ahead, our new goals are “Water for
People,” “Water for Food” and “Water for Planet” (pages 14-19).
Howard Hudson, Senior Editor
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MAIN FEATURE TRIPLE COP YEAR
THREE COPS, THREE EXISTENTIAL CHALLENGES, ONE OPEC FUND
From desertification through biodiversity to climate change – environmental challenges are shaping the development agenda and stakeholders are hard pressed to find viable answers By Axel Reiserer, OPEC Fund T he OPEC Fund for International Development is stepping up its
and invest in a more resilient future. That means addressing climate risks at the design stage of projects and identifying opportunities to improve their long-term performance,” said Vice President, Strategy Musab Alomar (see interview page 10). The schedule is as tight as the task is daunting.
efforts in 2026 to support integrated action across the three Rio Conventions on climate change, biodiversity loss and land degradation.“Our role is to help countries protect their development gains
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TRIPLE COP YEAR
From Mongolia… T he first event in the 2026 triptych was the 17th session of the Conference of the Parties (COP17) to the United Nations Convention to Combat Desertification (UNCCD) in Ulaanbaatar, Mongolia, from August 17-28 under the theme “Restoring Land. Restoring Hope.” Desertification is one of the biggest environmental challenges of our time, affecting up to 40 percent of the world’s land and threatening over one billion people globally. Mongolia, the host nation, is among the countries most severely affected with around 82 percent of its land already degraded, one of the highest percentages in the world. The capital Ulaanbaatar itself demonstrates the dramatic impacts of desertification. Exposed to extreme temperatures with winter temperatures averaging −16°C and dropping to −30°C, the bitter winter cold leads to intensive coal burning for heating, causing significant air pollution. Desertification and land degradation are now further exacerbating the challenge: Ulaanbaatar is overwhelmed by mass climate migration from displaced herders from across the country. According to estimates, around 60 percent of the population lives in sprawling tent districts on the outskirts of the capital. City leaders at COP17 explicitly warned that urban resources are reaching breaking point. Drought is often described as a shortage of rain, but specialists at COP17 said its severity is increasingly determined by what happens to land before the rain stops. “Drought is coming coupled with the impact of climate change,” UNCCD Executive
crops, grasslands and natural ecosystems survive dry periods. Degraded soils shed water more quickly and lose productivity, making
communities more vulnerable when temperatures climb or rainfall becomes erratic, according to experts. “You cannot maintain healthy soil without managing your water,” Fouad said. The connection between land and water is especially important for agriculture, two sectors which have high priority for the OPEC Fund, as demonstrated by its long history of engagement as well as its recent US$1 billion pledge to the World Bank’s Water Forward initiative (see page 14). João Campari, Global Leader of WWF’s Food Practice, made it clear: “If you don’t have water, you don’t have agriculture. If you don’t have land, you don’t have agriculture.” The OPEC Fund used its participation in COP17 to build on the momentum of the previous desertification conference in Riyadh in 2024. “Land restoration is not only an environmental goal, it is a development imperative,” said Gerardo Parco, Director, Sustainability and Climate Change, who together with Senior Country Manager Toshifumi Kazaoka represented the OPEC Fund in Ulaanbaatar: “We recognize that healthy land systems are fundamental to food security, economic opportunity and climate resilience. The OPEC Fund is scaling financing for drought management, nature-based solutions and resilient infrastructure.”
The conference secured a total of US$1.3 billion in financing from a broad range of donors for land restoration and drought resilience in 23 countries. As COP President, Mongolia launched the Steppe Action Agenda, including a US$1.2 billion Rangeland Flagship Initiative. Rangelands - including grasslands, savannas and other areas used by grazing animals and pastoral communities - cover 54 percent of the Earth’s land surface and support around two billion people, according to the UNCCD. The launch of the Drought Resilience Investment Facility, as the world’s first global finance instrument dedicated to this issue, marked another milestone. However, Ulaanbaatar ended without resolving one of the meeting’s key issues - whether to create a legally binding global drought agreement - postponing a decision until the next round of talks, set for Egypt in two years’ time. The issue had already been deferred from the previous COP two years ago. Esther Penunia, Secretary General of the Asian
Secretary Yasmine Fouad told the Associated Press. “It’s becoming more frequent, more intense and more prolonged.” Healthy soils absorb and store water, helping
Yasmine Fouad, Executive Secretary, UNCCD; Esther Penunia, Secretary General, the Asian Farmers Association; Linda Krueger, Director of Biodiversity and Infrastructure Policy, The Nature Conservatory (L-R)
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Photos (L-R): AFA; The Nature Conservatory
MAIN FEATURE
…to Armenia… N ature-based solutions are intrinsically linked with the preservation of biodiversity, a subject which was the theme of the 17th meeting of the Conference of the Parties (COP17) to the UN Convention on Biological Diversity (CBD) in Yerevan, Armenia, from October 19-30. The goal of the conference was a first review of the Kunming–Montreal Global Biodiversity Framework, adopted in 2022. The compact sets 23 targets and the aim was to shift from commitments to tangible results and to evaluate which agreed actions have been effectively implemented. The framework defines four long-term goals for 2050 to maintain the health of ecosystems and 23 action-oriented targets. While supporters hail the plan as a “Paris Agreement for nature,” detractors point out that the agreement is legally non-binding and entirely dependent on political goodwill. The final text also watered down mandatory disclosure requirements for large corporations and financial institutions regarding their environmental impacts, what critics see as loopholes. Despite the establishment of a Global Biodiversity Framework Fund, critics argue the financial mechanisms are highly inadequate: The target of mobilizing US$200 billion per year by 2030 is viewed as a fraction of what is actually required to halt extinction rates. Developing nations, home to the vast majority of the world’s remaining biodiversity, point out that the promised US$20-30 billion per year is insufficient and inequitably distributed to cover the immense economic sacrifices required. The OPEC Fund supports biodiversity with a range of programs and targeted tools, including the Nature Solutions Finance Hub. Established by the OPEC Fund together with the Asian Development Bank and Saudi Arabia in 2023, the facility aims to attract at least US$5 billion for projects involved in protecting, managing and restoring natural ecosystems. These solutions are critical in building climate resilience, with ecosystems like forests, wetlands and oceans playing key roles in carbon sequestration and temperature
regulation. They offer an effective way to tackle at the same time the two key issues mitigating climate change and conserving biodiversity. The Nature Solutions Finance Hub is complemented by regional and national programs such as the
Farmers Association, warned: “We cannot wait for COP18 for solutions.” Linda Krueger, Director of Biodiversity and Infrastructure Policy at The Nature Conservatory, a global environmental non-profit organization, also offered a divided opinion. “Negotiations delivered mixed results and a pace of progress that failed to mirror the pace of environmental change around us,” she said. “More than three billion people are already living with the consequences of land degradation, yet the world still faces a US$278 billion annual funding gap.” Private finance accounts for barely 6 percent of global investment in land restoration, according to UN reports. The UNCCD’s Yasmine Fouad said that “governments need to move from drought plans to investment plans, bringing private companies, local communities, women and young people into national platforms that can develop projects and attract financing.” Gerardo Parco offered direct support: “The OPEC Fund is scaling financing for drought management, nature-based solutions and resilient infrastructure.” This builds on the OPEC Fund’s US$1 billion pledge in December 2024 to the Riyadh Global Drought Resilience Partnership, launched by Saudi Arabia during the predecessor conference COP16. The partnership is designed to move countries from reactive crisis response to proactive drought management by connecting vulnerable nations with technical expertise, knowledge-sharing platforms, capacity- building support and financing for drought resilience investments. “More than three billion people are living with the consequences of land degradation, yet the world still faces a US$278 billion annual funding gap.” Linda Krueger, Director of Biodiversity and Infrastructure Policy, The Nature Conservatory
US$150 million Decentralization and Biodiversity Program for Colombia. The US$3 billion OPEC Fund Green-Blue Connect initiative integrates land and sea solutions, protecting biodiversity hotspots like coral reefs, seagrass meadows and mangroves, which function as crucial natural carbon sinks (also known as “blue carbon”). For the OPEC Fund, the participation in COP17 was a premiere, marking an important step in strengthening its engagement at the intersection of biodiversity, climate action and sustainable development. The OPEC Fund focused on mobilizing finance for nature-positive development and translating biodiversity commitments into concrete investment opportunities. In a series of high-level discussions and events, the delegation addressed the biodiversity impacts of the energy transition, integrating nature-related considerations into investment decisions and scaling up financing for ecosystem restoration. Key areas of engagement included innovative approaches to nature- positive investment through the ADB–EU Nature Solutions Finance Hub, the economics and bankability of ecosystem restoration and practical solutions for advancing a nature- positive socio-bioeconomy, an economic model that combines the sustainable use of biodiversity and ecosystem conservation with social inclusion, fair income distribution and the respect of traditional knowledge. By engaging with multilateral development banks and other partners, the OPEC Fund helped bridge the gap between global biodiversity ambitions and actionable financing, supporting the transition from policy commitments to investment and implementation.
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TRIPLE COP YEAR
…and on to Türkiye T he 2026 UN Climate Change Conference (UNFCCC COP31) is taking place in Antalya, Türkiye, from November 9-20 under the shared presidency of Türkiye and Australia. COP31 President and Turkish Environment, Urbanization and Climate Change Minister Murat Kurum described the COP31 Action Agenda as a “practical implementation platform” with four quantitative targets and 10 priority themes (detailed below).
The agenda is a reflection of the developments at previous COPs as well as political shifts. Over 70 countries failed to submit their required Nationally Determined Contributions (NDCs) at the 2026 conference. Negotiators also stripped out the phrase “phasing out fossil fuels” from the final document, while financial commitments remain far behind expectations. The COP31 Presidency drew its lessons from this. The concrete quantitative 2026 goals mark a shift from “abstract targets to strict accountability, real-world execution and financial restructuring,” as the strategy document for the conference says. Minister Kurum said at the UN General Assembly: “For us, implementation is not simply announcing more commitments but turning existing commitments into measurable results on the ground.” But eventually finance will dictate the success or failure of the summit. Negotiators are wrestling with a US$1 trillion funding gap to address existing climate targets. The final architecture and operationalization of the annual international climate finance target of US$300 million remains disputed and the funding for the implementation of the Belém Adaptation Indicators established at COP30 remains elusive. “We must facilitate access to finance,” underlined Minister Kurum. For the OPEC Fund, COP31 presents an important opportunity to advance its commitment to translating global climate ambitions into tangible development outcomes. With a growing climate finance portfolio and a strong focus on partnerships, the institution is working to connect climate commitments with investment opportunities that respond to the priorities of its partner countries. The OPEC Fund’s engagement at COP31 will focus particularly on two priorities of the Presidency’s Action Agenda: the Climate Implementation Bridge, which seeks to translate national climate commitments into concrete investments, and Rio Synergies, which promote integrated approaches across climate change, biodiversity and land degradation. Valerie Herzog, Senior Climate Change Specialist at the OPEC Fund, explained:
Murat Kurum, COP31 President and Turkish Environment, Urbanization and Climate Change Minister
COP31 Action Agenda: The four quantitative targets
Global Electrification Raise the share of final energy demand met by electricity from just over 20 percent today to 35 percent by 2035
Waste Reduction Halve the projected growth
in global municipal waste generation
Building Efficiency Reduce energy consumption intensity in the building sector by at least 25 percent
Circular Materials Increase the global usage rate of circular materials to 15 percent
COP31 Action Agenda: The 10 priority themes
• Zero waste and scaling up circular economy policies, • Food loss, waste and food security, • Oceans and seas protection and resilience, • Water and drought management, • Climate-resilient cities and infrastructure, • Climate action implementation mechanism (the “Climate Implementation Bridge”),
• Youth and active education engagement, • Green industrialization and low-carbon transformations, • Clean energy transition and electrification, and • Cross-sectoral action linking climate change, biodiversity loss and land degradation.
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MAIN FEATURE
“We see our role at the intersection of these two priorities: helping countries translate their climate commitments into policies, institutional capacity, investment pipelines and financing, while advancing integrated solutions that address climate change, biodiversity loss and land degradation together.” One example of this approach is the OPEC Fund’s US$3 billion Green- Blue Connect initiative, which brings together water, energy, land, oceans, food systems and resilient infrastructure through an integrated investment approach. Through its Green-Blue Connect Accelerator, the institution is also supporting technical assistance, innovation and upstream project preparation to help translate promising
climate solutions into investment-ready opportunities. Strengthening resilience in Small Island Developing States (SIDS) is another priority. Through its Island Resilience Facility, the OPEC Fund works with regional partners in the Caribbean and Pacific to identify investment priorities, support project preparation and develop pipelines of climate-resilient projects. By connecting country-driven priorities with technical assistance and financing opportunities, the facility aims to overcome barriers to climate finance and turn resilience needs into concrete investment opportunities. Building on its commitment to climate-vulnerable countries, the OPEC Fund is also advancing the Vulnerability
to Viability (V2V) Compact together with the Government of Barbados. The initiative aims to mobilize affordable financing for the world’s most climate- vulnerable countries, with a focus on water, education and health, three sectors essential to strengthening resilience and supporting long-term development. Türkiye is taking a major step towards sustainable and emission-free transport infrastructure with the recent INRAIL project which the OPEC Fund is supporting with a US$250 million public sector loan. The US$8.3 billion double- track and electrified greenfield railway line will bypass the Istanbul metropolitan area, reducing pollution and easing congestion. The OPEC Fund’s Private Sector team at COP31 will focus on how development finance institutions can help convert climate priorities into bankable projects, expand access to climate finance through local financial institutions and mobilize private and institutional capital at scale. Together, these initiatives illustrate the OPEC Fund’s approach to climate action: combining financing, technical expertise and partnerships to bridge the gap between global commitments and implementation, while delivering lasting development benefits for its partner countries.
“We see our role at the intersection of two priorities: helping countries translate their climate commitments into policies... while advancing integrated solutions that address climate change.”
Valerie Herzog, Senior Climate Change Specialist, OPEC Fund
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INTERVIEW VICE PRESIDENT STRATEGY “OUR ROLE IS TO HELP COUNTRIES PROTECT THEIR DEVELOPMENT GAINS AND INVEST IN A MORE
RESILIENT FUTURE” OPEC Fund Vice President, Strategy Musab Alomar on plans for COP31 and the next phase of climate action By Howard Hudson and Axel Reiserer, OPEC Fund
OPEC Fund Quarterly : Extreme heat, droughts and floods are putting increasing pressure on economies. What do these risks mean for the OPEC Fund’s partner countries and how are they shaping the institution’s strategic priorities? Musab Alomar: For our partner countries, climate resilience is closely linked to economic stability and development. A drought can reduce agricultural production, disrupt electricity supply and increase food import costs. A flood can damage infrastructure and interrupt essential services. These pressures affect livelihoods – often those of the most vulnerable – as well as public budgets, often in countries with limited resources to respond. Our role is to help countries protect their development gains and invest in a more resilient future. That means addressing climate risks at the design stage of projects and identifying opportunities to improve their long-term performance. For me, the strategic conclusion is clear: understanding climate risk is part of sound development finance. The infrastructure we support today must continue serving communities in the conditions they will face tomorrow. OFQ: Agriculture and food security are particularly exposed. Where can development finance make the greatest difference, both now and over the longer term?
MA: The immediate concern is how disruptions to production affect food availability, affordability and farmers’ incomes. The effects differ across countries, but poorer households and small producers often have the least capacity to absorb shocks. Development finance can help address several vulnerabilities combined. More reliable water management, better storage, access to weather information and stronger transport links can help farmers protect production and bring their goods to market. Support for local financial institutions can also improve access to finance and insurance for farmers and agricultural businesses. Over the longer term, we need food systems that can cope with changing rainfall and temperatures while maintaining healthy soils and using water sustainably. This requires investments shaped by local conditions. Our priority should be to help countries identify the blend of infrastructure, knowledge and institutional support that will make their food systems more productive and resilient. In Zimbabwe, for example, the Smallholder Irrigation Revitalization Project, which we co-financed with the International Fund for Agricultural Development (IFAD) and the government, helped more than 35,000 farmers, including nearly 21,000 women. It rehabilitated irrigation across 4,780 hectares, while 86 percent of participating households reported adopting environmentally sustainable
and climate-resilient technologies and practices. This illustrates how investment in infrastructure, combined with support to farmers, can help strengthen the capacity to manage climate risks. OFQ: Countries also need more electricity while their energy systems face growing climate pressures. How can they expand access while improving reliability and resilience? MA: Energy access, affordability and resilience need to be planned together. Countries need sufficient generation, but they also need networks that can deliver power reliably and withstand disruptions. Depending on the country, the response may include diversifying electricity supply, strengthening grids, investing in off-grid backup power solutions and storage and improving energy efficiency. Efficient cooling and better building design can also help manage demand. For essential services such as hospitals and water supply, continuity of power is particularly important. The benefits are tangible at the community level. In Nicaragua, the second phase of the OPEC Fund- supported Caribbean Coast Rural Electrification Project connected 2,375 households across 43 communities to the electricity grid, benefiting more than 12,000 people. These are the kinds of results that give meaning to our financing: extending essential services to communities that have long been underserved.
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INTERVI EW
“Understanding climate risk is part of sound development finance. The infrastructure we support today must continue serving communities in the conditions they will face tomorrow.”
Musab Alomar, Vice President, Strategy, OPEC Fund
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VICE PRESIDENT STRATEGY
alongside our Green-Blue Connect initiative, which links water, energy, land and ocean priorities. This approach helps us identify investments that address several needs together, such as improving water security while restoring ecosystems or reducing the energy required to provide water services.
Our experience in Malawi shows how this can be translated into results for communities.
OPEC Fund- financed projects completed over the last eight years helped install more than 1.5 GW in renewable energy.
Through the Nkhata Bay Town Water Supply and Sanitation Project, which we co-financed with the African Development
Bank, access to drinking water in the project area increased from 37 percent of households to almost 92 percent. Water availability also improved from an average of 16 hours to 23.5 hours a day. That combination of wider access and more reliable service is the kind of lasting improvement we want our investments to deliver. Delivery requires financing and preparation. With the Green-Blue Connect Accelerator we are supporting work that helps turn promising approaches into practical projects. Our wider financing operations provide the means to support investment at scale. We need to track progress from project preparation through approvals and implementation to improvements in services and resilience. OFQ: Many countries have clear climate priorities but struggle to secure financing. How do the OPEC Fund’s partnerships help close that gap, particularly for Small Island Developing States (SIDS)? MA: Any priority identified in a national plan needs considerable work before it can attract financing. Countries may need support to assess options, prepare feasibility studies, establish implementation arrangements and identify suitable financing partners. Smaller administrations can face particular capacity constraints. Our Island Resilience Facility addresses this early-stage project preparation gap. Working with regional partners and in collaboration with the UN climate
For the OPEC Fund, the starting point is a country’s development needs and energy circumstances. We can support investments that expand access and improve reliability while helping countries pursue their transition objectives. Assessing climate risks at the design stage helps ensure that these investments remain effective throughout their operating lives. OFQ: The OPEC Fund is currently reviewing its Climate Action Plan. What has been learned so far and what should guide the remaining period to 2030? MA: Since the adoption of our Climate Action Plan in 2022, we have strengthened the role of climate considerations in our operations and increased our climate finance. The current review is an opportunity to assess what has worked, where implementation remains difficult and how we can make the greatest contribution over the period to 2030. One lesson is that targets need to be supported by practical tools and implementation capacity. Our Climate Impact Operationalization Framework brings together climate risk screening, Paris Agreement alignment and climate finance accounting. It provides a more systematic basis for translating the plan into project decisions. We are also consulting colleagues who structure and implement operations to understand where opportunities are being captured and where additional
support is needed. The review will help inform where we will go in the next three years.
Ultimately, we want stronger projects and clearer evidence of the benefits our financing delivers. The 2025 results reported in our latest Development Effectiveness Report include more than 389,000 households gaining new or improved access to water and sanitation services, and more than 305,000 households gaining new or improved electricity connections or access to other improved energy sources through projects we supported. OPEC Fund- financed projects completed over the last eight years helped install more than 1.5 GW of renewable energy, with many more under construction. Our climate work should strengthen the resilience and long-term value of those services. OFQ: The OPEC Fund pledged an additional US$1 billion at the Water Forward event in April. Why has water become a strategic priority, and how are you translating that commitment into delivery? MA: Water connects many of our core development priorities. Reliable water services support health, agriculture, education, industry and jobs. Droughts and floods can disrupt several parts of an economy at once, making water a particularly important area for investment in resilience. Our additional US$1 billion pledge reflects that importance. It comes
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INTERVI EW
OFQ: What is the OPEC Fund’s central message at COP31, and what would make the conference a success from your perspective? MA: Our central message is that the OPEC Fund helps countries turn climate and development priorities into practical projects that improve lives and attract investment. COP31 should be about moving decisively from ambition to implementation. The international community has established increasingly clear climate goals. The challenge now is to translate them into investment at the scale and speed required, while ensuring that climate action also advances development, energy security, water security, food systems, resilience and economic opportunity. This is particularly important for the countries we serve. Climate change, “Success at COP31 would mean a stronger global architecture for implementation: one that connects national priorities with credible project pipelines.”
change authority UNFCCC, we support countries in identifying and prioritizing needs and developing proposals that can be presented to potential financiers. In the Caribbean and Pacific, regional cooperation provides a practical way to bring countries and technical partners together. Investment forums connect the resulting project priorities with financing opportunities. The same principle guides our wider partnerships, including those focused on energy innovation and nature. Their value lies in combining expertise, project preparation and access to finance. Success means that a country’s priority moves closer to implementation, with a clear owner and a credible financing pathway. OFQ: The United Nations Environment Programme’s recent report on exceeding 1.5°C adds urgency to the climate debate. What needs to change in the international response, and what does that mean for development finance institutions? MA: The report reinforces the need to reduce emissions and strengthen adaptation together. Limiting how far and for how long temperatures exceed 1.5°C matters greatly for the risks countries will face. For development finance institutions that means helping countries prepare for worsening climate conditions while continuing to support lower-emission development. It also means examining whether projects remain viable under a range of future conditions. The international development community needs to make implementation easier. Countries need more accessible financing, stronger support for project preparation and better coordination among partners. Financing approaches also need to reflect the nature of the investment. Many adaptation investments provide essential public benefits but generate limited direct revenue, so public and concessional resources remain important. We must use the available evidence to sharpen our response and accelerate delivery, while maintaining the ambition of the Paris Agreement, despite the question marks hanging over it.
biodiversity loss, land degradation, water scarcity and development constraints do not occur in isolation. They reinforce one another, and our response therefore also needs to be integrated. Through initiatives such as Green-Blue Connect, the Nature Solutions Finance Hub and the Island Resilience Facility, we are demonstrating how financing, technical assistance, project preparation and partnerships can come together to address interconnected challenges. There is also an important enabling role for digital transformation. Better data, digital infrastructure and technology can strengthen climate planning, improve the management of water, energy and natural resources, increase the resilience of essential services and help countries track whether investment is delivering the intended results. For me, success at COP31 would mean a stronger global architecture for implementation: one that connects national priorities with credible project pipelines, brings public and private finance together, strengthens adaptation and resilience, while giving developing countries greater confidence that international commitments will translate into tangible support. For the OPEC Fund, success would mean using COP31 as a platform for building partnerships and investment pathways that can endure well beyond the conference. We want to leave with stronger pipelines, clearer partnerships and concrete opportunities to deploy capital where it can have the greatest development impact. Ultimately, the measure of success will not be the number of commitments made at COP31. It will be whether those commitments change realities on the ground: whether communities are more resilient, whether families have reliable access to water and energy, whether farmers are better able to withstand climate shocks, whether cities and infrastructure are prepared for a changing climate and whether countries can pursue their development ambitions on a more sustainable and resilient path. That is the transition we want to help deliver: from climate ambition to investment, from investment to implementation and from implementation to lasting development impact.
Musab Alomar, Vice President, Strategy, OPEC Fund
Checking water supply connections at a hydroelectric power plant
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SUSTAINABLE DEVELOPMENT WATER FORWARD
WATER FOR PEOPLE, FOOD AND PLANET Taking a long-standing commitment to the next level: How the OPEC Fund is delivering sustainable development in the water sector in projects and programs By Mohammad Mazraati, Senior Development Impact Officer, OPEC Fund
W hen the OPEC Fund joined the global Water Forward initiative at the World Bank Spring Meetings in April 2026 with a pledge of an additional US$1 billion to reach 15 million beneficiaries, it was reinforcing a long-standing commitment. Water is the source of life and as such is key to all development. Recognizing this crucial role, the OPEC Fund to date has provided almost US$1.5 billion in funding to more than 150 water and sanitation projects worldwide. With Water Forward, the World Bank has set an ambition to advance water security for 400 million people by 2030, representing 10 percent of the world’s water-insecure population. The approach is built on three pillars: Water for People, Water for Food and Water for Planet. This strategy recognizes water as a critical connector across human development, economic productivity and environmental sustainability. Water for People focuses on achieving universal access to safe, reliable and affordable water and sanitation services, emphasizing service quality, equity and resilience – particularly for poor and vulnerable populations. Water for Food prioritizes efficient and climate-resilient water use in agriculture, supporting food security, rural incomes and economic growth while reducing excessive water withdrawals and pollution. Water for Planet emphasizes protecting aquatic ecosystems, managing floods and droughts and adapting to climate change through integrated water resource management and nature- based solutions.
The launch of Water Forward brought together ten multilateral development banks and development finance institutions, committing to specific targets for 2030. The financing gap is estimated at US$7 trillion. While this is huge, financing is not the only measure. The success of the initiative also depends on the consistency, transparency and credibility of results measurement across multilateral development banks (MDBs). Achieving this requires participating institutions to make concrete commitments under a harmonized measurement framework applied consistently across stakeholders. In current practice, project- and portfolio-level accountability is primarily assessed through beneficiary metrics over the project lifecycle, focusing on access rather than welfare. However, harmonized results measurement, anchored in common principles and adapted to distinct intervention logic is essential for enhancing development effectiveness across the Water Forward pillars. Water for People interventions aim to deliver excludable, individual-level services, for which beneficiary attribution
can credibly be established. As a result, population- based metrics (people with access to new or improved services) remain both meaningful and methodologically defensible.
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Photo: Riccardo Mayer/Shutterstock
SUSTAINABLE DEVELOPMENT
The approach of Water Forward is built on three pillars:
Water for People
Water for Food
Water for Planet
Cordoba Sanitation System Development Project, Argentina Completed June 2024 Financing
US$112 MN • US$60 million OPEC Fund • US$52 million Government
Results • Construction of the main sewer collector with over 6 km of pipelines. • Installation of 2 wastewater pumping stations. • Completion of 4 river crossings. • Construction and commissioning of a new wastewater treatment plant. Impact Improvement of health and living conditions for approximately 420,000 people.
15
WATER FORWARD
results are measured, aggregated and compared across increasingly integrated portfolios. As MDBs and development finance institutions scale up investments under the global Water Mission - spanning Water for People, Water for Food and Water for Planet - the credibility of targets depends not only on financing volumes, but on the internal consistency, transparency and analytical integrity of results measurement systems. The Water for People pillar illustrates the persistent tension between access measurement and welfare outcomes. While access-based metrics support attribution and comparability, they require explicit safeguards to prevent bias toward low quality or unsustainable services. Reporting aggregate access figures alongside tiered service levels, applying tier-sensitive costing logic and enforcing context-specific conversion factors are essential to ensure that scale is not achieved at the expense of adequacy, safety or sustainability. For Water for Planet interventions, credible accounting depends on agreed spatial models, explicit hazard reduction criteria and careful geographic ring fencing of populations whose exposure or vulnerability is demonstrably reduced. Across all pillars, there is a high risk of double counting, particularly in joint, multi-pillar and co-financed operations. The same goes for elements of calculation and estimation including the conversion factors that should remain normative and rely on agreed principles for definitions grounded in local demographic data, verified catchment populations and demonstrated service functionality. The effective harmonization must be principle-based to agree on theories of change on pillars, intervention-specific beneficiary definitions, attribution discipline, identification of project- induced effects and techniques to avoid inflation of results; transparency of assumptions, spatial boundaries, probability thresholds and conversion logics where all are context-linked.
Same Water Supply Project, Tanzania Completed January 2025 Financing US$35.8 MN • US$12 million OPEC Fund • US$10 million Arab Bank for Economic Development in Africa (BADEA) • US$13.8 million Government
In contrast, Water for Food interventions operate primarily through productive assets and livelihoods, not generalized population access. Here, the farming household is the analytically correct unit of analysis, reflecting how irrigation affects income, risk and productivity. Converting irrigated water volumes or hectares mechanically into population equivalents might obscure causal pathways and risks overstating impact. Water for Planet interventions present a qualitatively different challenge. These interventions target public goods and natural capital, where benefits are diffuse, intergenerational, and often non- excludable. MDBs therefore prioritize biophysical and systemic indicators such as ecosystems preserved, environmental flows restored or risks reduced over direct beneficiary counts. Where beneficiary figures are reported, they are treated explicitly as proxy indicators of reduced risk exposure, not service delivery. Improving development effectiveness Results Project supplies water to around 40 villages, including 17 villages in Mwanga, 16 in Same and 5 in Korogwe and also covers several small towns in these districts. Impact Supply of drinking water to around 450,000 people, significantly improving access to safe water, helping reduce waterborne diseases and easing the burden on households.
Regional distribution of OPEC Fund water security projects
1 (3%)
6 (14%)
8 (19%)
27 (64%)
Total water security projects: 42
Africa
Latin America & Caribbean
Asia
in the water sector requires a fundamental rethinking of how
Europe
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SUSTAINABLE DEVELOPMENT
Cumulative number of people reached by implemented projects
To institutionalize such convergence, the OPEC Fund proposes that MDBs issue a joint technical note, under existing coordination platforms, codifying core definitions (e.g. beneficiary, access, baseline), attribution rules, principles for conversion factors, eligible activity types and agreed approaches to aggregation and the avoidance of double counting. In sum, harmonization should be understood not as standardization, but as a meta framework for disciplined measurement and comparison. By formalizing convergence around shared principles while preserving methodological differentiation, MDBs can strengthen accountability, support better investment decisions and credibly demonstrate progress toward global water security targets. This approach provides a pragmatic and analytically robust pathway to enhancing development effectiveness across the water sector without undermining the complexity and diversity that characterize water interventions in practice.
Note: Completed or reached early operational maturity between 2018-2025
People (millions)
6
5
4
3
2
1
0
2018
2019
2020
2021
2022
2023
2024
2025
Wool and Mohair Promotion Project, Lesotho Completed 2023 Financing US$38.9 MN • US$12 million OPEC Fund • US$18.6 million IFAD (loan & grants) • US$4 million Government • US$4.3 million Local private sector and beneficiaries
Impact • The project reached more than 52,000 households (around 234,000 people) and trained more than 6,000 farmers in improved livestock practices, while about 13,000 rural producers accessed production inputs. • Productivity improvements helped farmers increase profits: 72 percent of wool producers and 80 percent of mohair producers reported income gains.
Results • Placing 547,491 hectares of rangeland under
An additional US$1 billion was pledged by the OPEC Fund
climate‑resilient management. • Climate‑smart rangeland work included brush control on 677.6 ha, reseeding of 169.7 ha. • Installation of 1,247 km of soil‑erosion control structures. • Establishment of 20 long‑term monitoring (LDSF) sites. • Water access improved through provision of water supply to 40 shearing sheds, construction of 11 livestock drinking points and wetland protection that boosted spring discharge and seasonal streamflow.
for Water Forward.
• Productivity gains were recorded in fibre quality:
superior wool increased from 11.24% at design to 24.9% at completion, and mohair yield rose from 0.75 kg/head to 1kg/head.
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WATER FORWARD
The OPEC Fund’s delivery Building infrastructure is one of the key operational priorities of the OPEC Fund’s Strategic Framework 2030, through which the institution supports expanding access to water and sanitation. The OPEC Fund has a long-standing history of promoting water security across three core areas: Water for People; Water and Sanitation (WASH); Water for Food (e.g. improved irrigation) and Water for Planet (e.g. flood and drought risk reduction, as well as the protection of water sources). Based on the 42 water projects that have been completed or that have reached early operational maturity between 2018 and mid‑2025 and reported developmental results, the OPEC Fund has contributed to initiatives in the water and sanitation, rural and urban development and agriculture sectors that have collectively supported approximately 5.4 million people in strengthening water security. Of this total, around 2.5 million beneficiaries can be attributed directly to the OPEC Fund’s own efforts with US$600 million in financial contributions. Most of these operations were in Africa,
followed by Latin America and the Caribbean.
The Economics of Water By Angus Downie, Principal Economist, OPEC Fund
The OPEC Fund’s enhanced ambition With its US$1 billion pledge in support of Water Forward, the OPEC Fund aims to reach an additional 15 million people by 2030. Along with project financing and the provision of essential grant funding, the OPEC Fund is also increasingly active at the level of policy making with the goal to create an institutional framework that will allow for the delivery of successful projects. The OPEC Fund Climate Solutions Week in April saw the launch of the Green-Blue Connect Accelerator, a pre-investment platform designed to move climate-resilient water and urban initiatives from early-stage concepts to bankable operations. The tool captures the multiple dimensions of water ranging from food to development. First projects have since been initiated, for instance supporting decentralized water storage for drought resilience, mangrove restoration in Sierra Leone or improved access to safe drinking water for children in climate-vulnerable areas of Bangladesh and Zambia.
W ater is unlike anything else. It is the foundation of life, but it also underpins economic activity and environmental sustainability. Unlike other economic inputs, there is no substitute for water: it is essential for drinking, sanitation, food production, energy generation, industrial processes and ecosystem health. In recognizing this irreplaceability, development banks increasingly view water security as a prerequisite for economic growth, poverty reduction, climate resilience and social stability. The World Bank’s recent report Investing in Water for People, Food, and Planet estimates that water- dependent sectors support around 1.7 billion jobs worldwide, illustrating
Food Security and Rural Development Program, Burundi Completed 2022 Financing US$51.6 MN • US$19.1 million OPEC Fund • US$30 million Global Agriculture and Food Security Programme • US$1 million IFAD • US$1.5 million Government and beneficiaries Results • The project treated 10,848 ha of land through watershed protection and reforested 890 ha, while 2,418.54 ha of marshlands were developed or rehabilitated for rice irrigation. • Irrigation works included 1,500 ha developed. • Rural connectivity improved through 214.5 km of rehabilitated/constructed roads. • Value-chain achievements included 1,205 vulnerable rice farmers receiving input kits.
Impact • The program reached more than 65,000 households, or about 400,000 individuals, and supported thousands of farmers through cooperatives, farmer field schools, and value chain services. • Nutrition interventions helped more than 2,000 malnourished children. • Overall, beneficiaries' annual income increased by 155 percent, and poverty dropped from 72.6 percent to 53.6 percent among participant households.
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