Development Effectiveness Report 2022

2022

EFFECTIVENESS DEVELOPMENT

REPORT

THE OPEC FUND for International Development

opecfund.org

TABLE OF CONTENTS

Foreword by the OPEC Fund Director-General

Executive Summary

CHAPTER 1 Background

CHAPTER 2 OPEC Fund Financing for Development

CHAPTER 3 The OPEC Fund and the Sustainable Development Goals

CHAPTER 4 OPEC Fund Project Results

CHAPTER 5 The OPEC Fund’s Development Effectiveness Approach

CHAPTER 6 Looking Ahead

Annex

Glossary

FOREWORD BY THE OPEC FUND DIRECTOR-GENERAL

Dear reader,

We are grateful for your interest in the OPEC Fund for International Development and pleased to present our first Development Effectiveness Report. This review measures the results of our projects towards the Fund’s core objective to make a decisive contribution to the Sustainable Development Goals (SDGs). It also takes stock of our analytical framework and sets out the Fund’s future approach. Ensuring the effectiveness of our operations is a key deliverable of our Strategic Framework 2030. The Framework, which was approved in 2019, provides the OPEC Fund with a clear direction of travel in its objective to en- hance its support to its partner countries. This informs its aim to become a premier MDB that is larger, agile and rele- vant to the needs of partner countries, an excellent steward of resources, and a strong contributor to the achievement of the UN’s Sustainable Development Goals. Development effectiveness is key to achieving this mission. We owe it to our member countries, who provided our mandate and financial muscle; we owe it to our partner countries, whose ideas we realize; and — most of all — we owe it to the people, whose everyday lives we improve with the impact we deliver.

That is exactly what this report captures. Our analysis shows that every OPEC Fund-approved project from 2018 to 2021 contributed to at least one SDG, with a majority (60 percent) contributing to two or more. In exceptional cases, we found the reach spread as widely as seven SDGs. Our activities benefit a broad variety of sectors. Across agriculture, health, transport, education, and water & san- itation, the greatest impact has been delivered via public sector projects. Meanwhile, our private sector projects have benefitted the financial sector and energy generation, es- pecially in renewables. Concrete results of projects com- pleted in the last few years include, for example, the em- powerment of more than 400,000 women, the support of 1.76 million farmers and the building or upgrading of more than 100 healthcare facilities. While we are proud of our achievements, they also spur us towards further improvements. To this end, we have intro- duced new tools such as a results framework, an evaluation readiness checklist and a strategic alignment checklist. As we roll out these tools, we not only deepen the impact of our projects but also strengthen our knowledge base.

Over the last 47 years, the OPEC Fund has provided more than

The OPEC Fund is proud of its commitment to continuous learning and development, which we are now applying to the design, delivery and monitoring of all our new projects. Over the last 47 years, the OPEC Fund has provided more than US$22 billion of its own funds across more than 4,000 projects in support of sustainable development where it is needed the most. At the same time, we have been part of much greater resource mobilization thanks to our de- velopment partners: Roughly four out of five operations are co-financed. By leveraging financing and increasing the number of players at the development table, we work towards the final, yet still critical, of the 17 SDGs: Partnering for the Goals. As demands grow, we are committed to also expand our activities and deepen our impact. Our annual Development Effectiveness Report will become an important yardstick for measuring success in full transparency and accountabil- ity towards our members and partners and the public alike.

US$22 billion of its own funds across more

than 4,000 projects in support of sustainable development where it is needed the most.

DR. ABDULHAMID ALKHALIFA

SUMMARY EXECUTIVE

Following approval of its Strategic Framework 2030, the OPEC Fund has since 2019 embarked on a journey to becoming a more effective and financially sustainable multi- lateral development bank (MDB) that is relevant to the needs of partner countries. To achieve this objective, the OPEC Fund has introduced enhancements to the way it operates

Furthermore, recognizing the synergies and scale that can be achieved when joining forces with partners, the OPEC Fund closely cooperates with bilateral and multilateral in- stitutions around the world. Facilitating increased lending through collaboration was particularly important during the COVID-19 pandemic and more recently at the outset of the food security crisis arising from the war in Ukraine.

in order to deepen development impact, while providing more ac- countability to stakeholders. This first Development Effectiveness Report takes stock of progress made and knowledge generated on the development effectiveness of the OPEC Fund’s activities to date.

240,409 households with new or improved water connections

As part of its commitment to achieving the Sustainable Development Goals (SDGs), in 2022 the OPEC Fund reviewed all operations approved since 2018 to assess delivery on this commit-

Since its establishment in 1976, the OPEC Fund has committed about US$22 billion in loans for 114 partner countries via sov- ereign operations (SO) and non-sovereign operations (NSO). The Fund finances projects in low- and middle-income coun- tries around the world and does not lend to its own mem- ber countries. The OPEC Fund also has a significant grants program providing free or concessional resources to mainly low-income countries. Projects support a variety of sectors critical to development such as infrastructure, agriculture, education and health, and the financial sector. More recently, support through trade finance and financial institutions have become important channels of OPEC Fund’s development finance. Meanwhile, the Fund has also dedicated significant resources to the cross-sectoral issues of climate action and food security. In its Climate Change Action Plan, the OPEC Fund has committed to further increasing these activities. In response to partner country development needs, the OPEC Fund has diversified its lending toolkit over time: SO instruments have expanded in past years to include program and policy-based lending to complement project lending, while NSO instruments include long- and short-term senior debt along with subordinated debt, guarantees and equity.

ment. The review found that all approved projects contrib- ute to at least one SDG, with a majority contributing to two or more. The top two SDGs that projects were aligned to were SDG 8 (Decent work and economic growth) and SDG 9 (Industry, innovation and infrastructure). This is in line with the OPEC Fund’s strong support for economic growth and development through infrastructure (including transport, energy, water & sanitation), as well as through the financial sector, rural development and multisector projects. To assess the extent to which the OPEC Fund’s lending re- sources have in fact helped to change people’s lives, the OPEC Fund also conducted a comprehensive review of the documented main results of all OPEC Fund projects hav- ing reached completion (for SO) or early operating maturity (EOM, for NSO) between 2018 and July 2022. Looking ahead, this evaluation exercise will be undertaken annual- ly and the results presented in each year’s Development Effectiveness Report.

The results of the review on the basis of available information point to significant development impacts, even though re- sults data were not documented for 31 percent of all analyzed

non-trade projects. Main development results the reviewed OPEC Fund-supported projects helped bring about include 10,853 kilometers of roads built or rehabilitated, 117 health care facilities upgraded, 240,409 households with new or im- proved water connections, 2.86 million households with new or improved access to electricity, 3.77 Gigawatts in new or re-

the OFRF will not only track key corporate performance, strategic alignment and results indicators across four levels (global/regional development progress, operations’ results, operational effectiveness, organizational efficiency), but is also accompanied by a project-level toolkit to ensure that projects are prepared in a way that ensures the consistent

furbished energy capacity (of which 334 Megawatts renewable), 342,096 MSMEs financed, 167 educational fa- cilities built or upgraded, 15,723 kilo- meters of transmission lines built or rehabilitated, 1.76 million farmers supported, and more than 400,000 women empowered.

assessment, monitoring and eval- uation of their development effec- tiveness. The OFRF project-level toolkit is already under implemen- tation, with the full launch of the OFRF indicators expected for 2025 following an initial two-year trial period.

>400,000 women empowered

Most results in the agriculture, health, transport, education and water & sanitation sectors were delivered by SO projects. Meanwhile, NSO projects contributed heavily to the achieve- ment of results in the energy sector and in support to micro, small and medium-sized enterprises (MSMEs). Reflecting the regional and sectoral distribution of the examined projects, most results measuring improved access to water & sanita- tion, healthcare and energy were achieved in Africa, while a majority of its MSMEs were supported in Asian countries, followed by Latin America and the Caribbean. It is important to note that data on beneficiaries (such as students, women, patients, minorities etc.), were not collected for many pro- jects, therefore, numbers reflecting end-beneficiaries are considered to significantly underestimate the actual reach of OPEC Fund project benefits. With the Strategic Framework 2030 stressing the central importance of development impact to the OPEC Fund’s mission, management created a dedicated Development Effectiveness function in 2020 and has developed a comprehensive results framework (the OPEC Fund Re- sults Framework, or OFRF) to anchor its approach to development effectiveness. Approved in September 2022,

The improved development results tracking and monitor- ing practices introduced under the new OPEC Fund Results Framework (OFRF) are not only expected to gradually in- crease the share of projects for which results data is avail- able, but will also put particular emphasis on measuring project deliverables, as well as the extent and benefits of their use. This will, in the future, allow the OPEC Fund to pro- vide an even more comprehensive picture of the reach and benefits of its projects. The OPEC Fund is committed to continuing and expanding its development work. The OFRF and its toolkit significantly enhance this aim by boosting the OPEC Fund’s capacity to learn from, and communicate the results of, its activities. In the coming years, development effectiveness efforts will be further strengthened via enhancing project evaluation, while also growing the database and systems capabilities for tracking results and alignment. Strengthened development effectiveness will provide a strong foundation for the Fund to grow the scale, scope and impact of its operations by informing the way the institution deepens its development footprint, and by establishing a culture of accountability and continuous learning.

CHAPTER 1

Following approval of its Strategic Framework 2030, the OPEC Fund (see box) in 2019 embarked on a journey to becoming a more effective multilateral development bank (MDB) that is larger, financially sustainable for the long term, responsive, relevant to the needs of partner countries, an excellent steward of resources, and a strong contributor to the achievement of the Sustainable Development Goals. The Strategic Framework defines the OPEC Fund’s strate- gic objective as the “maximization of Development Impact through a competitive, specialized, and efficient organiza- tion that strives to maintain a stable and financially sustaina- ble growth trajectory” . To achieve this objective, the OPEC Fund has introduced en- hancements to the way it operates, particularly in reporting project results, strengthening the ability to learn continu- ously and deepening development impact. In that context, the Fund has introduced a number of tools which will, in the coming years, increasingly allow it to broaden and deepen the development insights from its activities, while providing more accountability to stakeholders. ABOUT THE OPEC FUND FOR INTERNATIONAL DEVELOPMENT BACKGROUND 1

The OPEC Fund for International Development (the OPEC Fund) was established in 1976 as a multilateral institution in support of low- and middle-income countries. It is the only globally mandated develop- ment institution that provides financing from mem- ber countries to non-member countries exclusively. The OPEC Fund is committed to the delivery of the Sustainable Development Goals. To date, the OPEC Fund has committed over US$22 billion of its own resources to over 4,000 pro- jects in more than 125 partner countries worldwide with a total project value of some US$190 billion. In the regional distribution of commitments, Africa stands at 49 percent, followed by Asia at 31 percent and Latin America & the Caribbean at 15 percent. The OPEC Fund provides financing through its Ordinary Capital Resources (OCR) and its Special Capital Resources (SCR). OCR funds are primarily used for lending to middle-income countries, certain less-developed countries and to private sector borrowers in pursuit of social and economic development. SCR resources are used to provide funding at more concessional terms to lower-income countries.

This first Development Effectiveness Report takes stock of progress made and knowledge generated on the develop- ment effectiveness of the OPEC Fund’s activities to date. It was prepared by the OPEC Fund’s Development Effective- ness Unit, which is separate from the OPEC Fund’s opera- tional departments and provides guidance and oversight on development effectiveness matters. Each subsequent edi- tion of this report will build on the growing volume and vari- ety of information gained from the Fund’s strengthened de- velopment effectiveness assessment and tracking practices.

ABOUT

The OPEC Fund works with the public sector, private sector investors and multilateral development banks. It has double-AA ratings from the rating agencies Fitch and S&P and can provide financing in the form of loans, equity and grants. It also offers instruments such as trade finance, guarantees and risk-sharing facilities. Leveraging almost 50 years of global development work the OPEC Fund is also engaged in knowledge-sharing and advisory services.

general operations. The Governing Board furthermore guides and oversees specific areas of Management through four Board Committees (Audit & Risk, Budget & Strategy, Development Effectiveness, and Ethics). The OPEC Fund Management is headed by the Director- General, who is also the OPEC Fund’s Chief Executive Officer. The incumbent Director-General Dr. Abdulhamid Alkhalifa assumed his post in November 2018. For the OPEC Fund’s organizational structure, see Annex 1 of this report.

GOVERNANCE

MORE INFORMATION ABOUT THE OPEC FUND

The OPEC Fund’s resources consist of contributions made by its 12 member countries (Algeria, Ecuador, Gabon, Indo- nesia, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, United Arab Emirates and Venezuela). Its supreme authority is the Ministerial Council, composed of finance ministers of the member countries. The Council usually meets once a year and issues policy guidelines, approves the replenishment of the OPEC Fund’s resources, authorizes the administration of special funds and makes major policy decisions.

A wide range of publications, announcements and docu- ments by and about the OPEC Fund is available on

www.opecfund.org,

including its Annual Reports (available in print and online in English, French, Spanish and Arabic) and its audited Financial Statements. The OPEC Fund also publishes a quarterly magazine dedicated to questions of development and sustainability.

The OPEC Fund’s Governing Board usually meets four times a year and — subject to directives issued by the Ministerial Council — is responsible for the conduct of the OPEC Fund’s

2 CHAPTER 2

2 As a development finance institution, the OPEC Fund aims to improve lives by supporting promising development pro- jects and initiatives in countries around the world. To pro- vide an understanding of how the OPEC Fund has deployed its resources since inception in 1976, this chapter offers a high-level overview of the OPEC Fund’s financing opera- tions, including an analysis of the size, composition, trends and strategic alignment of its activities. To date, the OPEC Fund has committed roughly US$22 billion 1 in loans for 114 partner countries. 2 Annual commitments grew at an annual average of about 7 percent through the 1990s, with growth accelerating since the 2000s to an annual average of about 9 percent (Figure 1) . 3 The OPEC Fund finances public sector projects through its sovereign (SO) operations, as well as private sec- tor clients through its non-sovereign (NSO) products. NSO financing was introduced in 1998, with total NSO funds committed amounting to US$5 billion by end-2022. In 2007, the OPEC Fund started to offer trade financing to both SO and NSO clients, with more than US$4 billion in loans (20 percent of total loan commitments to date) facilitating exports and often critical imports (Figures 2 and 3) . FINANCING OPEC FUND FOR DEVELOPMENT US$MN 25,000 20,000 Figure 2: SO and NSO commitments

Figure 1: OPEC Fund cumulative loan commitments over time (US$ nominal and real terms)

15,000

US$MN

10,000

35,000

30,000

Sovereign operations

Non-sovereign operations

25,000

The OPEC Fund finances projects in a variety of sectors critical to development (Figure 4) . Infrastructure financing (transport, energy, and water & sanitation) amounts to about 43 percent of commitments to date, with many multisector projects (6 percent of commitments) also containing infra- structure components. Agriculture (11 percent), education (4 percent) and health (3 percent) are also traditional and important areas of OPEC Fund support. In the past decade support through financial institutions and trade finance have become additional focus areas.

20,000

15,000

10,000

commitments, real (2022) terms

commitments, nominal terms

2 This development not only highlights the importance of trade to OPEC Fund partner countries, but also leverag- es the efficiency and depth that OPEC Fund lending can achieve when channeled through local financial institutions with their extensive reach to far more and smaller benefi- ciaries than the OPEC Fund could finance on its own. The OPEC Fund has also dedicated significant financing to the cross-sectoral issue of climate action. A recent review cov- ering the years 2018-2021 showed that some 20 percent of non-trade approvals by the Fund went to investments on cli- mate change mitigation and adaptation. In September 2022, the OPEC Fund adopted a Climate Change Action Plan to raise the percentage of climate financing to 25 percent by 2025 and to 40 percent of all new financing by 2030.

1 This corresponds to roughly US$30 billion in today’s (2022) US dol- lars. In addition to its funded financing support, the Fund has also pro- vided about US$10.9 billion in short-term trade finance guarantees under risk-sharing agreements since the 2007 introduction of this instrument. 2 If grants are included, the total number of supported partner countries is 124. In addition to public or private sector borrowers of individual countries, the OPEC Fund has also lent to regional development banks which cover additional countries.

3 Numbers include US$1,052 million of commitments related to debt relief initia- tives of the 1980s and 1990s unless otherwise mentioned.

In response to partner country development needs, the OPEC Fund offers diverse financing products (Figure 4) . The instruments available under the SO window include project (investment) lending and program lending. Project lending is largely used to finance various types of infrastructure or human capital support projects, and represents the largest share of the SO project portfolio. Program lending includes budgetary support loans, policy-based lending in support of reforms, and crisis response loans.

The instruments offered under the NSO window include long- and short-term senior debt, as well as subordinated debt, guarantees and equity.

The OPEC Fund also offers trade loans and guarantees for both governments and private sector clients.

Figure 3: OPEC Fund commitments by sector (1976-2022)

Figure 4: Commitments by funded financing instrument (2013-2022)

Other

Health

Education

Budgetary Support Loans

Policy-Based Loans

Private sector equity

Water & Sanitation

3 3

Transport

SO Trade

Multisector

4 21

Financial Sector

NSO Trade

Trade

SO Project landing

Agriculture

NSO Project landing

Energy

Note: Trade includes trade transactions through financial institutions or directly with corporates and governments, typically for imports and exports of agricul- tural or other commodities. The sector distribution of these graphs exclude com- mitments related to debt relief initiatives.

Note: In addition to the funded instruments shown in this figure, the OPEC Fund has also issued roughly US$10.9 billion in guarantees since the introduction of this instrument in 2007.

2 One of the OPEC Fund’s latest financial instrument is pol- icy-based lending. To date, the institution has committed US$435 million in support of financial and digital inclusion reforms in Morocco, sustainable economic recovery in Bang- ladesh, accelerated and equitable economic transition in Uzbekistan, fostering improved fiscal management, trans- parency, private sector development and environmental re- forms in Kosovo, and helping the design and implementation of climate change action and policies in Panama. Recognizing the synergies and scale that can be achieved when joining forces with partners, the OPEC Fund closely cooperates with bilateral and multilateral institutions around the world. These include development organizations of its member countries, multilateral and bilateral development banks, specialized agencies of the United Nations, as well as non-governmental organizations and private sector part- ners. To date 75 percent of the total number of committed OPEC Fund loans have been in partnership with other devel- opment institutions. In April 2020, the OPEC Fund approved a US$1 bil- lion facility in response to the COVID-19 pandemic to support partner countries addressing urgent needs and long-term recovery challenges. In the follow- ing 20 months, the OPEC Fund approved a total of US$1,045 million in the form of loans to the public and private sectors as well as in trade finance. In addition, the OPEC Fund approved several grants. Of the 30 op- erations under the COVID-19 facility 19 were sovereign and 11 were non-sovereign operations. To date, more than US$900 million has been committed, of which more than US$700 million has been disbursed. THE OPEC FUND’S COVID-19 RESPONSE

Asia (US$390.5 million) and Africa (US$203 million) were the largest recipients of committed funds, followed by Latin America and the Caribbean (US$196.7 million) and Europe (US$20 million). Financial sector and multi- sector projects saw the deployment of most COVID-19 resources, followed by the health sector. In response to partner country requests linked to so- cio-economic challenges arising from the COVID-19 pandemic, the OPEC Fund offered a variety of finan- cial instruments (Figure 5) . Budgetary support loans

One of the OPEC Fund’s distinguishing characteristics is its ability to respond swiftly and effectively to emerging devel- opment needs worldwide. Most recently, the Fund provided rapid support following the COVID-19 pandemic (see box) and, in 2022, approved a US$1 billion Food Security Action Plan. The plan allocates OPEC Fund resources to help coun- tries tackle the challenges arising from increased commodity prices and disrupted supply chains. The OPEC Fund’s initia- tive inspired a similar action plan by the Arab Coordination Group with an initial minimum volume of US$10 billion.

OPEC Fund financing commitments have thus far benefit- ed 114 countries around the world. About half of total OPEC Fund commitments were in favor of African countries, fol- lowed by Asia (31 percent) and Latin America and the Caribbean (15 percent) (Figure 6) . Support to Africa is driv- en by SO commitments, whereas the largest share of private sector non-trade commitments have been to clients in Asian countries (Figure 7).

2020-21

to governments constituted a substantial part of the public sector (SO) portfolio under the pandemic re- sponse package (around 39 percent of committed funds). These loans were used to finance additional public healthcare expenditures and protect socially vul- nerable groups facing sharp economic downturns. Pol- icy-based lending, amounting to 41 percent of commit- ted COVID-19 funds, was used to support reforms and regulatory initiatives to promote economic recovery as well as social and financial inclusion. Trade loans were largely used to support essential imports, while the pri- vate sector was supported by channeling liquidity to businesses through financial institutions.

Figures 6 and 7: Total commitments (1976-2022) by region & client type

Europe

LAC

Asia

Africa

Figure 5. COVID-19 commitments by instrument type

US$MN

8,000

300

7,000

200

6,000

100

5,000

4,000

SO Project Lending

Budgetary Support Loans

Policy Based Loans

SO Trade Loans

Private Sector Lending

NSO Trade Loans

3,000

2,000

NSO

1,000

NSO

SO-Trade

NSO-Trade

Africa

Asia

LAC

Europe

Note: These graphs exclude operations targeting more than one region.

2 As shown in the charts on this page, the OPEC Fund’s financing has been committed to low- and middle-income partner countries in line with the OPEC Fund’s mission “to assist [developing countries] in their economic and social development efforts” 4 (Figure 8) . An overwhelming share (85 percent) of country-specific OPEC Fund financing has been committed for countries with GNI/capita levels of US$5,000 or less (Figure 9) 5 , and around 25 percent of total commitments to date have been committed to least- developed countries (LDCs), according to the 2021 LDC GNI/capita inclusion threshold of US$1,018. In addition to its lending operations, the OPEC Fund also has a sizeable grants program which can provide free or conces- sional resources. As of December 2022, the OPEC Fund has approved a total of US$687 million in support of 1,899 grant operations in 130 partner countries (see box) since inception. 15,000 5,000 20,000 15,000 10,000 5,000 0 Figure 8: Supported countries by total OPEC Fund commitments 1976-2022 and GNI per capita Figure 9: OPEC Fund funds committed 1976-2022 grouped by recipient country GNI per capita 4 The Agreement Establishing the OPEC Fund for International Development, as revised on May 27, 1980, Article 2.01, p5. 5 The GNI/capita intervals were chosen to ensure equal size and ease of understanding, while providing an approximate correspondence to the World Bank’s US$4,255 threshold for the GNI/capita below which countries are designated low-income or lower-middle income. The shares of committed country-specific funds provided to countries with GNI/capita levels of US$5,000 or less (or private sector borrowers within these countries) are 85 percent for SO operations to 82 percent of for NSO operations. Commitment US$MN Partner country GNI/capita (US$) Partner country GNI/capita (US$MN) 0-4,999 5,000-9,999 10,000-14,999 >15,000

20,000

10,000

Commitments per partner country (US$MN)

600 partner institutions. Grants have been channeled through over

2 With grant operations the OPEC Fund supports devel- opment initiatives aimed at building public goods and addressing the specific needs of the most vulnerable and disadvantaged groups in partner countries, espe- cially least developed countries. Grants have been chan- neled through over 600 partner institutions, including UN agencies and other international non-governmental organizations. OPEC Fund grant financing has often enabled partners to leverage more resources for pro- jects from other donors, thereby amplifying their scope, sustainability and potential impact. In addition to sup- porting the poorest countries, the OPEC Fund also uses grants to help enhance the quality of loan project design and implementation by, for example, building local ca- pacity for the planning and execution of Fund-support- ed development projects. The OPEC Fund has committed significant grant re- sources to agriculture and rural development initiatives aimed at enhancing food security and livelihoods of rural populations in partner countries. Other grants sup- ported initiatives in the water sector, such as capacity building of water system operators and water reuse for agricultural purposes. OPEC FUND GRANT OPERATIONS

the inclusion of children with special needs, supported girls’ education, and provided assistance to schools in refugee host communities.

In the energy sector, OPEC Fund grants have enhanced ac- cess of rural populations in developing countries to safe, clean and affordable energy services, including through electrifica- tion, energy efficiency and clean cookstoves. In the health sector, a special grant program created to tackle challenges linked to HIV/AIDS was expanded to include other global health challenges such as fighting neglected tropical and non-communicable diseases. Emergency aid grants have not only helped countries respond to unforeseen natural or man-made calamities through recov- ery and reconstruction, but increasingly support measures to anticipate and mitigate the adverse impacts of disasters. Another special grant program provides dedicated assis- tance to Palestinian refugees and Palestinians in the occupied territories, enhancing access to basic and financial services, essential infrastructure and food security. The OPEC Fund has also sponsored scholars from developing and low-income countries to take part in international con- ferences and seminars, supported various study and research projects and funded a merit-based scholarship award pro- gram for students from developing partner countries. OPEC Fund grant resources have overwhelmingly benefited the poorest countries, with 98 percent of committed grant resources dedicated to countries with GNI/capita levels of below US$5,000 (Figure 10).

In the education sector, OPEC Fund grants have sup- ported schools in rural and marginalized areas, enhanced

Figure 10: OPEC Fund grant commitments grouped by partner country GNI/capita

Grant Commitment US$

400

300

200

100

0-4,999

5,000-9,999

>10,0000

3 CHAPTER 3

3 The OPEC Fund is committed to contributing to the achieve- ment of the Sustainable Development Goals (SDGs). In 2022, the OPEC Fund conducted a review of all operations ap- proved since 2018 6 to assess delivery on this commitment. The review found that all OPEC Fund-approved projects contribute to at least one SDG, with a majority (60 percent) contributing to two or more. On average, each project con- tributes to two SDGs, with a maximum of 7 SDGs 7 (Figure 11) . Overall, OPEC Fund operations approved since 2018 contribute to almost all SDGs (Figure 12) . 8 SUSTAINABLE THE OPEC FUND AND THE DEVELOPMENT GOALS Figure 12: SDGs contributed to by OPEC Fund operations approved 2018 - mid-2022 Figure 11: Number of SDGs supported per project Nr. of SDGs per project 7 6 5 4

The top two SDGs that OPEC Fund projects were aligned to were SDG 8 — Decent work and economic growth, with 185 (or 69 percent of all reviewed) projects contributing, fol- lowed by SDG 9 — Industry, innovation and infrastructure, with 139 (or 51 percent projects contributing). This is in line with the OPEC Fund’s strong support for economic growth and development through the financial sector, as well as for infrastructure development through transport, energy, water & sanitation, rural development and multisector projects. 9 The wide range of SDGs that OPEC Fund operations con- tribute to reflects the diversified and wide-ranging nature of the approved portfolio. One-third of projects contributed to SDG 1 — No poverty, making it the third-most frequent goal for OPEC Fund operations. For all SDG contributions, see Figure 13 .

Nr. of projects

6 All 270 projects approved between the beginning of 2018 and Q3 2022 were assessed for SDG alignment. To do so, each project’s objective, description and targets/expected development outputs and outcomes were mapped and the ap- plicable SDGs to which the project is expected to contribute were identified. To qualify for alignment, a project needed to either plausibly contribute to a specific SDG indicator and/or target. 7 The one project supporting 7 SDGs is a rural development project in Sierra Le- one which supported climate-resilient agriculture and a variety of activities to improve the productivity and livelihoods of smallholder farmers. It contributed to SDGs 1, 2, 6, 8, 9, 10 and 17.

8 The only exceptions for projects approved during this specific time period are SDGs 14 (Life below water) and 15 (Life on land).

9 For the sector mix of the reviewed portfolio, see Annex 2, Figure 2.2.

3 Figure 13: Number of projects contributing to each SDG Note: The analysis covered the 270 projects approved 2018-Q3 2022. Numbers sum to more than the total number of projects because most projects contribute to more than one SDG. 185 88 49 30

139

7 6

3 Each SDG features a variety of concrete underlying targets, describing the drivers behind the achievement of the goals. To provide a better understanding of the SDG aspects sup- ported by OPEC Fund-financed projects, the below sections show contributions by specific SDG target. The sum of pro- jects contributing to the targets under each SDG can sum to more than the total number of projects per SDG because projects often contribute to more than one SDG target. Under SDG 1, OPEC Fund operations mainly contributed to targets 1.2 and 1.4 (Table 1) . Fund-supported projects contributing to SDG 1 typically aim to reduce poverty by improving access to basic healthcare, education, and other services; by helping farmers improve their livelihoods; or by supporting policy reforms. Projects approved since 2018 that contribute to SDG 1 include, for example, a US$50 million loan in continued support of multi-pronged poverty reduction pro- grams in Tanzania, as well as a US$23 million loan for helping El Salvador upgrade gravel roads to ensure all-weather access to basic services in high-poverty rural areas. Table 1: End poverty in all its forms everywhere Nr. of contributing projects % of contributing projects 1.2 By 2030, reduce at least by half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions 41 15% 1.3 Implement nationally appropriate social protection systems and measures for all, including floors, and by 2030 achieve substantial coverage of the poor and the vulnerable 1 0.4% 1.4 By 2030, ensure that all men and women, in particular the poor and the vulnerable, have equal rights to economic re- sources, as well as access to basic services, ownership and 31 11% SDG target

control over land and other forms of property, inheritance, natural resources, appropriate new technology and financial services, including microfinance

1.a Ensure significant mobilization of resources from a variety of sources, including through enhanced development cooperation, in order to provide adequate and predictable means for developing countries, in particular least devel- oped countries, to implement programs and policies to end poverty in all its dimensions 24

3 Under SDG 2, the targets with most project contributions are targets 2.a and 2.3 (Table 2) . In line with the nature of SDG 2, OPEC Fund-supported projects contributing to this goal are typically focused on sustainably improving farmer produc- tivity, practices and incomes in the agriculture sector and on supporting rural development and food security more broadly. Projects approved since 2018 include, for example, a US$10 million loan to Belize to improve food security of poor and vulnerable populations, as well as a US$15 million loan to strengthen the sustainable use of natural resources for increased agricultural productivity in Malawi. SDG target

Table 2: End hunger, achieve food security and improved nutrition and promote sustainable agriculture

% of contributing projects

Nr. of contributing projects

2.1 By 2030, end hunger and ensure access by all people, in particular the poor and people in vulnerable situations, including infants, to safe, nutritious and sufficient food all year round 2.2 By 2030, end all forms of malnutrition, including achieving, by 2025, the internationally agreed targets on stunting and wasting in children under 5 years of age, and address the nutritional needs of adolescent girls, pregnant and lactating women and older persons

2.3 By 2030, double the agricultural productivity and incomes of small-scale food producers, in particular women, in- digenous peoples, family farmers, pastoralists and fishers, including through secure and equal access to land, other productive resources and inputs, knowledge, financial services, markets and opportunities for value addition and non-farm employment 28

10%

2.4 By 2030, ensure sustainable food production systems and implement resilient agricultural practices that increase pro- ductivity and production, that help maintain ecosystems, that strengthen capacity for adaptation to climate change, extreme weather, drought, flooding and other disasters and that progressively improve land and soil quality 2.a Increase investment, including through enhanced inter- national cooperation, in rural infrastructure, agricultural research and extension services, technology development and plant and livestock gene banks in order to enhance agricultural productive capacity in developing countries, in particular least developed countries

14%

3 The top two targets OPEC Fund-supported projects contrib- ute to under SDG 3 are targets 3.8 and 3.3 (Table 3) . Most projects supporting SDG 3 are try to improve health out- comes by improving healthcare infrastructure or services, as well as access to clean water and sanitation. A few transport sector projects focused on road safety also contribute to SDG 3. Projects approved since 2018 that sup- port SDG 3 include, for example, a US$20 million loan to help Uganda expand and upgrade cardiovascular healthcare cov- erage and quality, and a US$6 million loan to help Suriname improve its basic healthcare infrastructure. Table 3: Ensure healthy lives and promote well-being for all at all ages Nr. of contributing projects % of contributing projects 3.2 By 2030, end preventable deaths of newborns and children under 5 years of age, with all countries aiming to reduce neonatal mortality to at least as low as 12 per 1,000 live births and under 5 mortality to at least as low as 25 per 1,000 live births 1 0.4% 3.3 By 2030, end the epidemics of AIDS, tuberculosis, malaria and neglected tropical diseases and combat hepatitis, wa- ter-borne diseases and other communicable diseases 7 3% 3.4 By 2030, reduce by one third premature mortality from non-communicable diseases through prevention and treat- ment and promote mental health and well-being 1 0.4% 3.6 By 2020, halve the number of global deaths and injuries from road traffic accidents 6 2% SDG target

3.8 Achieve universal health coverage, including financial risk protection, access to quality essential health-care services and access to safe, effective, quality and affordable essen- tial medicines and vaccines for all 18 3.c Substantially increase health financing and the recruitment, development, training and retention of the health workforce in developing countries, especially in least developed coun- tries and small island developing States 2

3 Under SDG 4, OPEC Fund projects mainly contribute to tar- get 4.a (Table 4) by supporting the provision, expansion and improvement of education infrastructure. Projects approved since 2018 in support of SDG 4 include a US$30 million loan to strengthen the capacity of vocational training in China, as well as a US$23 million loan to build a new university campus for improved higher education in Burkina Faso. SDG target

Table 4: Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all

% of contributing projects

Nr. of contributing projects

4.1 By 2030, ensure that all girls and boys complete free, equi- table and quality primary and secondary education leading to relevant and effective learning outcomes 5

4.3 By 2030, ensure equal access for all women and men to affordable and quality technical, vocational and tertiary education, including university

0.4%

4.a Build and upgrade education facilities that are child, dis- ability and gender sensitive and provide safe, non-violent, inclusive and effective learning environments for all 11

Under SDG 5, OPEC Fund projects mainly contribute to tar- get 5.5 (Table 5) in that OPEC Fund projects support wom- en’s full participation in economic life by helping financial institutions in Colombia, Uganda, Cambodia and Vietnam

expand access to finance by women-led MSMEs. Through policy-based loans, the OPEC Fund is also supporting finan- cial inclusion in Morocco and policy reforms for increased economic and social inclusion of women in Uzbekistan.

Table 5: Achieve gender equality and empower all women and girls

% of contributing projects

SDG target

Nr. of contributing projects

5.1 End all forms of discrimination against all women and girls everywhere 1

0.4%

5.5 Ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic and public life 5

3 The top two targets supported by OPEC Fund projects under SDG 6 are targets are target 6.a and 6.1 (Table 6). Typical OPEC Fund projects in support of SDG 6 aim to expand access to safe drinking water and sanitation, as well as improving water efficiency and wastewater treatment. OPEC Fund projects ap- proved since 2018 in support of SDG 6 include, for example, a US$50 million loan to the Republic of Maldives to improve the living conditions of approximately 20,000 people in 13 outer islands by providing sustainable access to safe water supply and sanitation services, and a US$30 million loan to increase the amount of safe drinking water available to populations in the capital of the Democratic Republic of the Congo. Table 6: Ensure availability and sustainable management of water and sanitation for all Nr. of contributing projects % of contributing projects 6.1 By 2030, achieve universal and equitable access to safe and affordable drinking water for all 11 4% 6.2 By 2030, achieve access to adequate and equitable sani- tation and hygiene for all and end open defecation, paying special attention to the needs of women and girls and those in vulnerable situations 8 3% 6.4 By 2030, substantially increase water-use efficiency across all sectors and ensure sustainable withdrawals and supply of freshwater to address water scarcity and substantially reduce the number of people suffering from water scarcity 6 2% 6.a By 2030, expand international cooperation and capaci- ty-building support to developing countries in water- and sanitation-related activities and programs, including water harvesting, desalination, water efficiency, wastewater treat- ment, recycling and reuse technologies 14 5% SDG target

3 SDG 7 has traditionally been a strong focus area of the OPEC Fund, as reliable and sustainable access to energy is key to development. The top three SDG 7 targets supported by OPEC Fund projects approved since 2018 are 7.1, 7.2 and 7.a (Table 7) . Projects approved since 2018 that contribute to SDG 7 include, for example, a US$30 million loan for building SDG target

a 200MW solar plant in Egypt, a US$36 million loan to support the integration and expansion of Mozambique’s electricity grid, and a US$120 million policy-based loan to Panama for specific actions that will allow the country to reduce and limit its greenhouse gases emissions while becoming more resil- ient to climate change.

Table 7: Ensure access to affordable, reliable, sustainable and modern energy for all

% of contributing projects

Nr. of contributing projects

7.1 By 2030, ensure universal access to affordable, reliable and modern energy services 18

7.2 By 2030, increase substantially the share of renewable energy in the global energy mix

7.3 By 2030, double the global rate of improvement in energy efficiency 5

7.a By 2030, enhance international cooperation to facilitate access to clean energy research and technology, including renewable energy, energy efficiency and advanced and cleaner fossil-fuel technology, and promote investment in energy infrastructure and clean energy technology 7.b By 2030, expand infrastructure and upgrade technology for supplying modern and sustainable energy services for all in developing countries, in particular least developed countries, small island developing States and landlocked developing countries, in accordance with their respective programs of support

3 Within SDG 8 most projects contributed to targets 8.10 and 8.1 (Table 8) . Given the wide variety of development interventions that can foster economic growth, target 8.1 is cross-cutting and OPEC Fund projects in a multitude of sectors contributed to it. The OPEC Fund’s support through financial institutions and trade finance contributed to target 8.10 given its focus on expanding access to financial services around the world. Projects approved since 2018 in support of SDG 8 include a US$25 million loan to a financial interme- diary for the financing of infrastructure projects across Latin America and the Caribbean and a US$20 million loan to help Ghana upgrade its port and transport corridor network for enhanced socio-economic development, trade and regional integration. Table 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all Nr. of contributing projects % of contributing projects 8.1 Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 per cent gross domestic product growth per annum in the least developed countries 58 21% 8.3 Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises, including through access to financial services 3 1% 8.5 By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value 28 10% SDG target

8.10 Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance and financial services for all 115

43%

3 The main targets that OPEC Fund operations contributed to under SDG 9 were 9.a and 9.1 (Table 9). Given the Fund’s strong support to infrastructure and MSME finance, SDG 9 has been a focus area of OPEC Fund support. Projects ap- proved since 2018 in support of SDG 9 include, for exam- SDG target

ple, a US$75 million loan for Bangladesh to improve regional connectivity by building a bridge, as well as a US$45 million loan for helping Turkmenistan to enhance the capacity and efficiency of maritime transport operations and to develop in-country shipbuilding capacity.

Table 9: Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation

% of contributing projects

Nr. of contributing projects

9.1 Develop quality, reliable, sustainable and resilient infra- structure, including regional and transborder infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all 9.3 Increase the access of small-scale industrial and other en- terprises, in particular in developing countries, to financial services, including affordable credit, and their integration into value chains and markets 9.a Facilitate sustainable and resilient infrastructure develop- ment in developing countries through enhanced financial, technological and technical support to African countries, least developed countries, landlocked developing countries and small island developing States

21%

17%

34%

Under SDG 10, the main target supported by OPEC Fund op- erations is target 10.1 (Table 10), which focuses on reducing inequality by helping increase and sustain income growth for lower-income segments. The OPEC Fund has contributed to SDG 10 mainly through its support to agriculture and rural

development. Projects approved since 2018 in support of SDG 10 include a US$20 million loan for Senegal to develop agricultural value chains, infrastructure and capacity, and a US$15 million loan for Niger to strengthen the resilience of rural communities facing food and nutrition insecurity.

Table 10: Reduce inequality within and among countries

SDG target

% of contributing projects

Nr. of contributing projects

10.1 By 2030, progressively achieve and sustain income growth of the bottom 40 per cent of the population at a rate high- er than the national average 17

10.2 By 2030, empower and promote the social, economic and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, religion or economic or other status 1

0.004%

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