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
4
22
6
Transport
SO Trade
Multisector
4 21
6
4
%
Financial Sector
9
%
20
NSO Trade
21
Trade
52
SO Project landing
11
Agriculture
NSO Project landing
15
17
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.
15
Powered by FlippingBook