OPEC Fund Annual Report 2022

ANNUAL REPORT

RISING TO THE CHALLENGE

ANNUAL REPORT

RISING TO THE CHALLENGE

TABLE OF CONTENTS

THE OPEC FUND FOR INTERNATIONAL DEVELOPMENT ANNUAL REPORT 2022

01 | LANDMARKS

At a Glance 2022

8-9

Foreword by the Director-General

10-11

Climate Action Plan

12-13

Food Security Action Plan

14-15

OPEC Fund Development Forum

16-17

02 | OPERATIONS

Operational Highlights – Tables

20-23

Delivery by Sectors

24-37

Future-proofing Farming in Côte d’Ivoire

24-25

Unleashing SMEs in Paraguay

26-27

Plain Sailing in Turkmenistan

28-29

Turning the Tap for Health and Growth in Malawi Powering Pakistan’s Energy Transition Growth in Chad STEMs from Education Helping Africa to Build Up Critical Infrastructure

30-31

32-33

34-35

36-37

Other Funding

38-43

Bringing Morocco Financially Online

38-39

Boosting Imports for Distant Maldives Preparation is the Key to Success

40-41

42-43

03 | THE OPEC FUND

About the OPEC Fund

46-47

Member Countries

Governance

49-51

Strategic Framework 2030 - Progress Update

52-53

Partners Make a Difference

54-55

Our Engagements

56-57

Annex

58-65

LANDMARKS 01

AT A GLANCE 2022

RESULTS

PUBLIC SECTOR

We committed US$1.6 billion in 2022 in support of 48 trans actions around the world. At a time of global turmoil, our funding provided much-needed security and stability where it was needed most. We responded to short- term threats such as food supply disruption and developed a long- term climate action strategy.

The OPEC Fund provided US$979 million in 21 public sector projects in 2022. Engagements covered a wide range of sectors such as agriculture, infrastructure development and energy. Public sector projects covered all of the OPEC Fund’s regions.

PRIVATE SECTOR

The OPEC Fund’s support to the private sector in 2022 amounted to US$287 million through 9 projects. Most of the funding was provided to local financial institutions for on-lending to small and medium-sized enterprises, supporting growth and securing jobs. Most projects were in Asia, followed by Africa and Latin America & the Caribbean.

TRADE FINANCE

Responding to severe disruptions in international supply chains following the COVID-19 pandemic and the war in Ukraine, the OPEC Fund has stepped up its support to keep international trade flowing. The OPEC Fund has seen strong demand for financing and mobilized US$398 million for transactions in Africa and Asia.

01 | LANDMARKS – AT A GLANCE

POLICY-BASED LENDING

FUNDING PROGRAM

A product of growing importance, policy-based lending allows the OPEC Fund to support structural reform programs that are implemented in a variety of sectors in partner countries. In 2022, such loans were extended to the governments of Côte d’Ivoire, Kosovo, Morocco, Paraguay and Uzbekistan.

The OPEC Fund sold its first bond through a private placement to a single investor in December. The US$50 million bond was issued with a three-year tenor and a sustainability label, following the roll out of the OPEC Fund’s Sustainable Development Goals Bond Framework.

FOOD SECURITY ACTION PLAN

CLIMATE ACTION PLAN

In September, the OPEC Fund adopted its first dedicated Climate Action Plan addressing the twin challenges of energy access and climate change. Under the approach, the OPEC Fund commits by 2030 to increase its climate financing to 40 percent of all new financing and to mainstream climate action into its project cycle focusing on climate resilience, mitigation and adaptation.

In response to the severe disruptions of global food supplies caused by the war in Ukraine, the OPEC Fund in June adopted a US$1 billion Food Security Action Plan leading to a US$10 billion facility by the Arab Coordination Group. The program provides emergency support for imports as well as long-term financing for structural reforms.

STRATEGIC FRAMEWORK

Following the successful implementation of the first phase, the OPEC Fund launched the second stage of its Strategic Framework 2030 with the goal of delivering “transformational growth”. The OPEC Fund introduced a Development Effectiveness Framework, an Environment, Social and Governance (ESG) Policy and an independent Administrative Tribunal as final recourse for the resolution of employment disputes.

OPEC FUND DEVELOPMENT FORUM

Raising its public profile the OPEC Fund hosted its inaugural Development Forum in Vienna in June. More than 250 guests representing governments, international development organizations and businesses discussed how to address pressing issues through concrete actions under the overarching theme “Driving Resilience & Equity”. The Development Forum 2023 will take place on June 20.

FOREWORD BY THE

DIRECTOR-GENERAL

In the face of a global economic downturn, the OPEC Fund rose again to the challenge.

DR. ABDULHAMID ALKHALIFA OPEC Fund Director-General

Dear Reader,

The OPEC Fund’s engagements were widely distributed across our core regions of Africa, Asia and Latin America & the Caribbean. We saw significant increases in public sector lending and very positive trends in our private sector activities. Our trade finance program is playing an important part in helping to overcome global supply chain disruptions. What characterized our performance in 2022 was the need to combine short-term emergency action with support for long-term structural reforms. Massive disruptions of food supply chains led to a dramatic resurgence of hunger across the world. Prices rose rapidly and made essential supplies unaffordable for the most vulnerable populations. The OPEC Fund responded with a US$1 billion Food Security Action Plan in June leading to a US$10 billion facility from the Arab Coordination Group (ACG).

Implementation proceeded quickly: I was able to sign an initial US$100 million loan with the government of Jordan in October, forging an agreement that combines funding for emergency imports of grain with financing investments in storage infrastructure. It is important to note that our loan was part of a wider financing package that will eventually total almost half a billion US dollars and includes contributions from the Islamic Development Bank and the European Bank for Reconstruction and Development. This is indicative of the OPEC Fund’s ability to mobilize funds from considerably larger development partner institutions. Cooperation is likewise our chosen approach when it comes to climate ac- tion. Addressing the twin challenges of energy access and climate change, the

The OPEC Fund for International Development is looking back on a tumultuous year for people world- wide. In the face of a global economic downturn, soaring inflation and severe disruptions in basic supplies, the OPEC Fund rose again to the challenge and committed US$1.6 billion in new fund- ing through 48 projects around the world. Our results demonstrate our steadfast commitment to the achievement of the United Nations Sustainable Development Goals and South-South cooperation. This mandate, which our founders imparted when they established the OPEC Fund in 1976, remains the source of our strength. Our robust financials allow us to fulfil our role in line with the aspirations of our member countries for whose support, guidance and advice we are grateful.

01 | LANDMARKS – FOREWORD

OPEC Fund adopted its first dedicated Climate Action Plan in September. In supporting a just, sustainable and equitable energy transition, our am- bitious, yet realistic goal is to com- mit 40 percent of all new financing to climate financing by 2030. The harmonization and standardization of methodology will pave the way for deeper cooperation with governments, multilateral development banks and the private sector in support of climate adaptation, mitigation and resilience. Putting our Climate Action Plan into immediate practice, one of the OPEC Fund’s first agreements was a US$120 million loan to the Republic of Panama in support of its national environmen- tal policy with a specific focus on the design and implementation of climate change action and policies. The OPEC Fund’s new strategy also paved the way for a joint US$24 billion climate facility with our ACG partners.

In order to deepen our development impact, the OPEC Fund has recently been raising our profile both as an investor and an advocate. Our inaugural Development Forum last June attracted more than 250 leaders of governments, international organizations and businesses to Vienna, our host city. Our success- ful debut at the UN Climate Change Conference COP27 in Egypt last November is one we will continue to build on as we strive to best support global partners, including our member country United Arab Emirates, which is hosting the next round of this critical global event, COP28, in November and December 2023 in Dubai. The OPEC Fund’s 2022 performance also reflected the institutional pro- gress we are making in implementing our Strategic Framework 2030. The second phase - now started - will further enhance our operations in

order to deliver “transformational growth” and build a resilient organization. This is crucial given the enormous global needs. We must not allow the current turbulence to distract us from our goal of achieving the Sustainable Development Goals. For us, the current challenges must be a call to redouble our efforts and become even more effective in our delivery and indispensable in our impact. Allow me to thank our member countries for their steadfast support, our partner countries for the excellent cooperation, our business partners for the effective collaboration and our staff for their commitment and dedication. Without these contributions, our success would not be possible. I am proud and honored to lead our institution and

I look forward to what we will accomplish in the years ahead.

CLIMATE

ACTION PLAN

With the adoption of its first dedicated Climate Action Plan in September 2022, the OPEC Fund is taking on the twin challenges of energy access and climate change.

Committed to the delivery of the United Nations Sustainable

Alkhalifa, the OPEC Fund will main- stream climate financing throughout its project pipeline.

The Climate Action Plan was developed on the basis of a comprehensive review of historic OPEC Fund commitments. The analysis of the project portfolio from 2018 to 2021, based on net pro- ject approvals, excluding trade finance projects, numbered 134 public and private sector projects totaling US$18.3 billion, of which the OPEC Fund’s share amounted to US$4.13 billion in financ- ing. Of this total, 57 projects (42 per- cent of total projects) included climate finance components worth US$826 million (20 percent of portfolio).

Development Goals (SDGs) since their proclamation in 2015, the OPEC Fund has long viewed SDG7 – Affordable and Clean Energy as one of its top priorities. With its Climate Action Plan, the OPEC Fund has now taken the next step towards an energy transition that is just, equitable and sustainable. The plan sets the target to increase the share of climate financing to 40 percent of all new financing by 2030. To achieve this “ambitious, yet realistic” target, in the words of Director-General Dr. Abdulhamid

Beginning in 2023, the OPEC Fund will subject all new projects to climate screening, identifying climate action potential while systematically including low-carbon and climate resilient options in project approval documentation. In addition, once the Multilateral Development Banks (MDBs) Joint Framework for Paris Alignment is finalized, the OPEC Fund will fully align a proportion of all newly approved projects.

Of those climate finance com ponents, US$607 million were

PANAMA

The OPEC Fund signed a US$120 million loan to the government of Panama to support the country’s climate change actions and policies. The Panama Support Program for the National Climate Change Policy aims to mitigate, contain and reverse the effects of climate change, helping Panama to achieve its long-term climate change commitments aligned with the Paris Agreement. CAF - Development Bank of Latin America is supporting the project with an additional US$320 million loan.

This loan helps guide the transformation of our socio-economic development. Our aim is a decarbonized green economy and a resilient society with healthy productive systems and ecosystems. Our focus is on strengthening public climate change policies. These include carbon negativity across 10 priority sectors, for example: energy, biodiversity and sustainable infrastructure.

LIGIA CASTRO DE DOENS Director of Climate Change, Ministry of Environment, Panama

01 | LANDMARKS – CLIMATE ACTION PLAN

dedicated to mitigation (investments to reduce emissions) and the other US$219 million to adaptation (invest- ments to reduce vulnerabilities and build resilience). Climate financing in the public sector was higher (66 percent) than in the private sector (34 percent). The majority of projects with a climate component were in the energy sector (37 percent), followed by water (25 percent) and agriculture (23 percent). The OPEC Fund’s Climate Action Plan will focus on climate adaptation, mitigation and resilience with contri- butions in the following areas: • Promote transformative climate investment through public and private investments in energy, transport, agriculture, food, water and smart cities; • Drive innovative climate finance solutions for the private sector by financing low-carbon and climate resilient projects and facilitating on-lending;

• Support climate diagnostics, plan- ning and policies by offering assis- tance to partner countries through grant-funded technical assistance in partnership with other MDBs and development finance institutions. To maximize the impact of its climate financing, the OPEC Fund will continue to work with partner institutions and to prioritize projects that “crowd-in” the private sector. The OPEC Fund also commits to joining international climate finance initiatives such as the MDB Climate Finance Working Group, and from 2023 onwards to measure climate finance, greenhouse gas emissions and emission reductions based on agreed methodologies and best practices. The OPEC Fund has a very high mobiliza- tion rate with roughly four out of five operations co-financed with institution- al or private sector partners.

Group launched a US$24 billion climate financing facility at the UN Climate Change Conference COP27 in November 2022 in Egypt. The facility will support the energy transition, increased resilience of food, transport, water and urban systems, and the promotion of energy security among vulnerable populations including in least developed countries and small island developing states. The OPEC Fund participated in COP27 with a strong delegation led by its Director-General and used its presence to progress initiatives such as the Climate Finance and Energy Innovation Hub, which will start with a clean cooking pilot project in Madagascar. By building bridges and expanding its network, participation at the conference also served as a springboard for COP28, to be hosted by the OPEC Fund member country United Arab Emirates.

The OPEC Fund’s leverage was demonstrated shortly after the

adoption of its Climate Action Plan, when the majority of institutions represented in the Arab Coordination

Clearly in the case of Panama, pricing carbon neutrality and carbon absorption capacity should be considered key in the ambitious and just transition to create better socio-economic opportunities and tackle income inequality issues. The country’s strategy and policies include the eventual establishment of the ‘National Carbon Market’, seeking to monetize its carbon sequestration potential as one of the few nations that have reached carbon negative status. Our loan supports the country in its advancement on this mission.

ROMULO MARTINEZ Senior Country Manager, Public Sector Operations, OPEC Fund

FOOD SECURITY ACTION PLAN

The Food Security Action Plan is the OPEC Fund’s response to the devastating effects of the war in Ukraine on the global supply of food and fertilizers. Ukraine was one of the world’s largest producers of wheat, corn and sunflower oil, and Russia used to be the largest exporter of fertilizers. The ensuing supply disruptions have caused a “global hunger crisis of unprecedented proportions [where] as many as 828 million people go to bed hungry every night”, according to the UN World Food Programme.

The particularly sharp impact felt in many partner countries of the OPEC Fund prompted a swift response. The Food Security Action Plan, adopted in June 2022, was one of the first initiatives of its kind by an internation- al organization. The initial volume of US$1 billion for the period 2022-2024 was soon afterwards multiplied, when the Arab Coordination Group, of which the OPEC Fund is a member, launched a US$10 billion food package. The OPEC Fund’s Food Security Action Plan identifies immediate, medium and long-term needs and focuses on three interrelated priorities:

The Plan finances programs that address the cross-cutting challenges to food security and provides financing through public and private sector loans as well as grants to partner countries and clients whose food security is endangered. The initial timeline runs from 2022-2024, but developments are being carefully monitored and will inform follow-up actions. While making a sizeable contribution from its own resources, the OPEC Fund is aware that resolving the food supply crisis will need decisive and coordinated interventions from the international community. One example of this approach is the Emergency Food Security Project in Jordan, where the OPEC Fund is joining forces with the Islamic Development Bank and the European Bank for Reconstruction and Development for a US$430 million package that provides short-term financing of imports and long-term structural investments.

1. Sustainable food systems that can withstand negative impacts on value chains;

2. Agricultural commodity supply chains; and

3. Sustainable production and con- sumption.

01 | LANDMARKS – FOOD SECURITY ACTION PLAN

The OPEC Fund Food Security Action Plan was designed to make a real difference where it matters most.

The latter is an example of how the OPEC Fund’s plan addresses the urgent need for diversification in many of its partner countries, including leveraging domestic potential as well as creating more resilient import structures.

farmers and agribusinesses amid the current food supply disruptions.

Another US$15 million was loaned to a smallholder project in Zimbabwe. In response to the catastrophic floods in Pakistan, the OPEC Fund provided a US$1 million emergency relief grant specifically to address food security. The OPEC Fund’s approach to the food supply crisis is fully aligned with its Climate Action Plan, as food production accounts for some 40 percent of global greenhouse gas emissions. At the same time, the impacts of climate change are increasingly affecting agricultural yields, as extreme weather events occur with rising frequency and intensity. Longer-term responses to the food security crisis must support the development of sustainable and resilient agricultural systems.

Trade integration is also vital. Domestic plans need to be

coordinated to strengthen resilience and boost local as well as regional production capacities. Multilateral development organizations play a vital role in facilitating and coordinating such efforts. The Jordan loan was far from the only significant project under the Food Security Action Plan in 2022. The OPEC Fund also signed a US$30 million loan agreement with Banco Sudameris in Paraguay, with 40 percent allocated to support

OPEC FUND

DEVELOPMENT FORUM

Strengthening its role as a development organization dedicated to delivering South-South cooperation by forging global partnerships, the OPEC Fund for International Development hosted its inaugural Development Forum in June 2022 in Vienna.

Under the overarching theme “Driving Resilience & Equity” the event brought together ministers from OPEC Fund member and partner countries, heads of the Arab Coordination Group institutions, senior officials of multilateral development banks and UN agencies as well as private sector representatives, to an audience of more than 250 invited guests. The goal of the conference was to translate the analysis of the significant challenges faced in the areas of climate change, universal access to clean and affordable energy and food security into practicable solutions and concrete actions. This led to a number of initiatives and signings: • Together with the United Nations Capital Development Fund and the UN-affiliated organization Sustainable Energy for All, the OPEC Fund announced the establishment of a new Climate Finance and Energy Innovation Hub. Designed as a global platform, the facility will harness the power of financial innovation to source, unlock, de-risk and scale-up investments in energy access and transition. The program recognizes the crucial role of the private sector and aims to leverage each US$1 of sovereign finance to attract US$4 of green and sustainable capital for projects. Appreciating the key role of clean cooking for many of the poorest countries in the world, operations will start with a pilot project in Madagascar to which the OPEC Fund is contributing US$40 million.

01 | LANDMARKS – OPEC FUND DEVELOPMENT FORUM

• The Asian Development Bank and the OPEC Fund launched a trust fund to improve project readiness in developing countries.

• The International Renewable Energy Agency and the OPEC Fund signed a Memorandum of Understanding to facilitate access to innovative financing solutions, unlock investment and support project development. The overall aim is to promote renewable energy investment while enabling access to sustainable finance in developing countries.

• The OPEC Fund and the regional South American development bank FONPLATA signed a cooperation agreement to broaden and deepen their partnership.

• The OPEC Fund and the Republic of Kosovo signed a framework agreement for private sector operations with a focus on infrastructure, connectivity, energy and water.

In addition to the formal conference agenda, the Development Forum provided opportunities for networking and bilateral meetings. Taking stock OPEC Fund Director-General Dr. Abdulhamid Alkhalifa concluded: “One clear takeaway was the need for urgent, targeted and joint action in all crucial areas, particularly on energy access and climate change. We are very encouraged by the success and positive momentum generated at our Forum which provides the energy to move forward swiftly and forcefully.” Building on this commitment the OPEC Fund will hold its next Development Forum on June 20, 2023 in Vienna with the goal of establishing the event as a fixture in the international conference calendar. It serves as an opportunity to bring together member and partner countries with the international development community and functions as a springboard to the UN Climate Change Conference COP28, to be hosted for the first time by the OPEC Fund member country United Arab Emirates.

Bringing the world together to discuss issues of global relevance.

OPERATIONS 02

OPERATIONAL HIGHLIGHTS (IN US$MN)

By commitments (agreements signed during 2022)

2022

2021

2020

2019

2018

Since inception

By source

OCR

1,439

1,280

1,203

1,117

1,603

23,834

SCR

225

203

387

845

Grants

644

By category

Sovereign

1,262

874

1,145

780

1,297

18,755

Non-Sovereign

402

609

445

337

306

5,924

Grants

644

Sovereign operations

By sector

Agriculture

220

161

125

2,435

Transport & Storage 173

205

276

175

317

4,733

Water & Sanitation

114

223

1,452

Energy

133

2,672

Education

102

1,033

Health

778

Policy-based Lending 435

435

Trade Finance

283

137

235

275

313

2,357

Other

111

301

259

2,861

By region

ASP

266

225

272

235

267

4,322

ESA

175

140

172

3,440

LAC

143

380

2,711

MEC

469

201

368

174

192

4,194

WCA

285

203

332

149

287

4,087

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

02 | OPERATIONS

Non-sovereign operations 2022

2021

2020

2019

2018

Since inception

By sector

Financial Institutions

260

441

130

1,956

Energy

118

852

Transport & Storage

189

Trade Finance

255

161

165

2,034

Other

893

By region*

ASP

1,049

ESA

100

900

LAC

107

923

MEC

178

150

127

1,682

WCA

152

187

138

1,233

Grants

By sector

Multisectoral

Agriculture

146

Humanitarian Aid

118

Health

155

Education

Energy

Water & Sanitation

Other

By region

Africa

211

Asia

249

LAC

Europe

Multi-regional

139

*Does not include US$137 million in multi-regional operations committed since inception

OPERATIONAL & FINANCIAL DATA (IN US$MN)

SPECIAL CAPITAL RESOURCES

ORDINARY CAPITAL RESOURCES

2016 2017 2018 2019 2020 2021

2022 2020 2021

2022

Portfolio

Outstanding Loans

4,511

4,949

5,259

5,527

4,282

4,458

4,970

1,237

1,277

1,396

by Operation

Sovereign

3,471

3,863

4,244

4,432

3,021

3,167

3,586

1,237

1,277

1,397

Non-Sovereign

1,040

1,085

1,015

1,095

1,261

1,291

1,384

Disbursements

831

1,113

1,406

1,481

1,025

1,133

1,335

292

223

381

by Operation

Sovereign

602

836

1,134

1,135

656

687

906

292

223

381

Non-Sovereign

212

262

251

333

361

443

425

Grants

02 | OPERATIONS

SPECIAL CAPITAL RESOURCES

ORDINARY CAPITAL RESOURCES

Financial highlights

2016 2017 2018 2019 2020 2021

2022 2020 2021

2022

Selected statement of financial position data

Assets

7,168 7,318 7,380 7,224 5,919 6,085 6,232 1,666 1,732 1,804

of which

Sovereign Loans

3,209 3,347 3,542 3,704 2,842 3,040 3,357 1,203 1,244 1,287

Non-Sovereign & Trade Finance Loans

1,069 1,218

1,270 1,338 1,281

1,320 1,494 34

Liquidity Assets

1,994 1,914 1,814 1,836 1,439 1,358 1,016 428

456

436

Equity Investments

120

152

127

118

108

110

123

Liabilites

165

189

177

1,785 269

194

166

Equity

7,003 7,129 7,203 5,438 5,649 5,892 6,066 1,653 1,720 1,788

of which

Member Country Contributions

4,262 4,262 4,262 2,324 2,380 2,424 2,507 1,557

1,581

1,607

Reserves

2,740 2,867 2,941

3,114 3,269 3,468 3,559 95

139

182

Income Statement Data

Income from Development Financing Income from Liquid Investments Currency Valuation and Other Income

114

134

148

165

194

164

101

111

156

144

(51)

(4)

Expenses

(60)

(62)

(68)

(70)

(72)

(71)

(73)

(13)

(11)

(12)

Net Income

170

169

233

144

153

A full version of the financial statements is available at https://opecfund.org/publications

FUTURE-PROOFING FARMING IN CÔTE D’IVOIRE

Agriculture is the mainstay of many developing economies, but modernization is key to maxi- mizing value and ensuring sustainability. In 2022, the OPEC Fund provided US$295 million to the agriculture sector in partner countries worldwide.

As the world’s top producer of cocoa and with over half its territory dedicated to agriculture, Côte d’Ivoire has enormous export potential. Yet its capacity to process cocoa, cashews and other valuable foods remains limited, depriving the economy of critical funds and the potential to upgrade its value chain. The country faces a number of interconnected problems. First, agriculture is poorly mechanized because of a lack of investment, particularly among young farmers and small businesses. Second, pot-holed roads connecting farmlands and markets lead to heavy post-harvest losses, further reducing farmers’ in- comes. Third, the focus on cash crops has raised dependence on food imports while also causing deforestation, which is accelerating with climate change. With food security at the top of the global agenda, the OPEC Fund and the African Development Bank (AfDB) are now leading a project in Côte d’Ivoire that is boosting agricultural efficiency while maximizing value added. The project aligns with the country’s National Agriculture Investment Plan 2021-2025, which aims to accelerate “the structural transformation of the economy through industrialization and cluster development”. The project will be implemented in four provinces selected in consultation with the government: Bagoué, Hambol, Poro and Tchologo located in the north of the country. These areas cover a quarter of the national territory and account for about 10 percent of the total population of Côte d’Ivoire. It has been identified as the region hosting the most vulnerable population facing recurrent food crises. The target population in the project area reaches 65,000 households, representing 400,000 people.

The project’s holistic approach will enable more efficient and inclusive contracting between all stakeholders via the smoother functioning and transparency of markets, and via greater accessibility to goods and services. These aspects will be supported by a regulatory framework that is more conducive to contracting, more respectful to the rights of farmers, while firmly establishing social standards, health standards and above all environmental standards.

KOBENAN KOUASSI ADJOUMANI Minister of Agriculture & Rural Development, Côte d’Ivoire

02 | OPERATIONS – DELIVERY BY SECTORS

Our counterparts in Côte d’Ivoire value our relationship for being particularly close and accessible as we strive to improve the efficiency of their agriculture sector amid the broader challenges of climate change and food insecurity. This project is an excellent example of ongoing synergies with our partners at the AfDB. OMAR AL-KADHI Senior Country Manager, West & Central Africa, Public Sector Operations, OPEC Fund

With a total volume of just over US$280 million, including US$60 million from the OPEC Fund, the loan aims to increase national self-sufficiency. It will professionalize family farms, improve connecting roads to markets and establish tax-free agro-industrial parks, where large traders will be able to upgrade value chains to produce, process and market agricultural products in a more efficient manner. To ensure inclusion and sustainability, at least half of all beneficiaries are women and half are young people. The project contributes to the achievement of five UN global goals: SDG 1 - No Poverty, SDG 2 - Zero Hunger, SDG 5 - Gender Equality, SDG 10 – Reduced Inequalities and SDG 13 - Climate Action.

40 %

Share of the world’s cocoa produced by Côte d’Ivoire 5-7 % Côte d’Ivoire’s share of global profit generated by the sector

55 %

Share of Ivorian cocoa producers living below the poverty line

UNLEASHING SMEs IN PARAGUAY

Financial institutions are unique in their ability to reach small businesses — protecting liquidity, jobs and business continuity. In 2022, the OPEC Fund provided US$260 million to financial institutions in partner countries worldwide.

Small and medium-sized enterprises (SMEs) make up the lion’s share of Paraguay’s economy, representing 97 percent of all businesses and creating more than three quarters of all employment. Yet they face an obstacle that cuts across many developing countries: the gap in access to credit, which limits economic growth. The SME finance gap in the country is about US$4 billion, with around 20 percent of SMEs lacking sufficient access to financial products. Together with Banco Sudameris, the OPEC Fund is helping to support this key segment of the economy. Paraguay is a major producer and exporter of agricultural and livestock products such as soy, wheat, corn and meat — making agribusiness- es the main driver of the economy and food exports the main source of foreign currency. With the COVID-19 pandemic and subsequent economic slowdown, all of this was disrupted and agribusinesses were particularly hard hit. Now, thanks to a US$30 million loan from the OPEC Fund, many have found relief. Forty percent of the loan is allocated to agribusiness SMEs,

while 60 percent will finance SMEs in a range of other sectors to promote job creation and economic recovery. The loan has already facilitated access to funds for more than 50 SMEs, addressing liquidity needs, protecting jobs and ensuring business continuity.

97 %

Share of SMEs in Paraguay’s economy US$4 BN SME finance gap in Paraguay

US$30 MN Loan from the OPEC Fund to Banco Sudameris

The commitment of the OPEC Fund since 2019 has been accompanied by a major effort by Sudameris in support of the SME sector. That sector was profoundly affected by the pan- demic but has since recovered and is growing again thanks to this support. Sudameris is extremely grateful for the trust placed in us by the OPEC Fund, and we are sure that our coop- eration will continue to grow year after year.

JERONIMO NASSER CEO, Banco Sudameris

02 | OPERATIONS – DELIVERY BY SECTORS

As the second facility extended to Banco Sudameris, the loan has enabled the OPEC Fund to position itself as a lender of choice while also ensuring a smooth roll out. Having supported Paraguay’s development for over 40 years, the OPEC Fund has the advantage of in-depth knowledge and the ability to use best practices from similar partnerships in the

region. Given the importance of the agricultural sector for the economy, the loan was executed rapidly thanks to prior lessons learned. The loan agreement aligns with several UN global goals: SDG 1 - No Poverty, SDG 2 - Zero Hunger, SDG 8 - Decent Work and Economic Growth, and SDG 10 - Reduced Inequalities.

Seeing projects like this come to life is very rewarding. You see how the effort we put in on a daily basis changes the lives of the beneficiaries for the better. Our goal is to have a real impact, especially in the communities. Most agricultural end clients are located in rural areas, which tend to be harder to reach. There, we are really making a big difference.

ESTEBAN CHEDIAK, Investment Manager, Private Sector & Trade Finance Operations, OPEC Fund

PLAIN SAILING IN

TURKMENISTAN

Transport drives international trade — but the latest vessels and equipment must be matched with a well-trained workforce. In 2022, the OPEC Fund provided US$173 million to the transport sector in partner countries worldwide.

The Marine Merchant Fleet Project co-financed by the OPEC Fund will equip the maritime fleet of Turkmenistan with modern vessels, boost the volume of passenger and freight traffic, and enhance the capacity and efficiency of the national maritime fleet. The capacity building component of the project is critical for the development and sustainability of maritime transport in Turkmenistan.

Located at a strategic position where trade routes from Europe to Asia cross the Caspian Sea, Turkmenistan has great potential in transit and the opportunity to become a major player in transport and logistics services.

The government of the country, which holds the world’s fourth-largest gas reserves, has recognized this chance and is currently implementing a large-scale modernization and improvement program. New roads, railways and pipelines are now under construction and are part of regional and international transit corridors such as the Transport Corridor Europe Caucasus Asia (TRACECA) trade route. Maritime transportation is of critical importance for the movement of international freight across the Caspian Sea, the largest inland body of water in the world, linking Kazakhstan, Russia, Azerbaijan, Iran and Turkmenistan. However, most of the state-owned fleet is made up of old and obsolete vessels — rendering freight transport through Turkmenistan risky, inefficient and expensive. The government is addressing the issue with an ambitious investment program to modernize the Turkmenbashi International Sea Port — a key hub in the TRACECA. The main maritime route is the ferry service between Baku, the capital of Azerbaijan and Turkmenbashi, a city of some 70,000 inhabitants on the eastern shore of the Caspian Sea and the terminus of the Trans-Caspian Railway.

ANNADURDY KOSAYEV Chairman of the Maritime and River Lines Agency of Turkmenistan

Since time immemorial seafaring has been an engine of trade.

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TRACECA transit corridor 14 countries, 12 sea ports, 22 land-based routes 1 MN tons Additional annual freight transport capacity

20,000 Additional passengers per year

The Balkan Shipyard, part of the Turkmenbashi International Sea Port, has been chosen to expand its capacity in shipbuilding and maintenance. Although the shipyard is equipped with state-of-the-art machinery, lack of technical expertise has so far limited activities to small-scale maintenance. This issue is addressed by a new joint project signed by the OPEC Fund, the Islamic Development Bank and the government of Turkmenistan in 2022. A loan with a total volume of US$150 million, of which the OPEC Fund is providing US$45 million, will finance the immediate construction of three sea vessels at the premises of the Balkan Shipyard, combined with technology transfer and training. In the coming years, the government plans to build nine vessels at the Balkan Shipyard. Once completed, the project is expected to raise annual freight transport capacity by one million tons and increase passenger numbers by 20,000 per year, while reducing freight costs and cargo waiting time.

The project will facilitate state-of-the-art technology and know-how transfer to the Turkmen shipbuilding industry, and positively contribute to improving management practices and the regulatory framework of the Turkmenbashi International Sea Port. This should ultimately strengthen the country’s technical and institutional capacity to develop the shipbuilding sector in the future.

To achieve this goal, knowledge sharing will be as crucial as investments. With the OPEC Fund, Turkmenistan has found a long-term partner who can offer both.

OLGA MIKHAILOVA Country Manager MENA, Eastern Europe & Central Asia, Public Sector Operations, OPEC Fund

TURNING THE TAP FOR HEALTH & GROWTH IN MALAWI

Provision of safe drinking water and modern sanitation is critically important not only for healthcare but also for wealth creation. In 2022, the OPEC Fund provided US$15 million to water & sanitation in partner countries worldwide.

Despite being one of the least developed countries in the world, with over half the population living below the poverty line, Malawi manages to provide safe drinking water to almost 90 percent of its people. Yet demand for safe drinking water, as well as modern sanitation, remains unmet in several parts of the country, including Dowa District — just 50 km north of the capital, Lilongwe. Present capacity meets less than 25 percent of demand because of dilapidated infrastructure and the rising needs of the Dzaleka camp, home to more than 45,000 refugees, from Burundi, Rwanda and the Democratic Republic of the Congo.

Meeting daily demand is just half the story, however. Like many of its neighbors in southeast Africa, Malawi’s growth and development strategy sees infrastructure as key to economic prosperity, and highlights water as a cross-cutting issue. The government has therefore made it a priority to im- prove and increase supply of potable water and sanitation services to urban and rural communities.

Apart from the public health benefits of improved sanitation, the Dowa Town Water Supply Project will have other positive impacts due to its technical de- sign. The selective replacement of older and smaller pipelines will benefit the environment as it will avoid leakages, while ensuring more efficient use and delivery. The project will also provide jobs to both genders during the construction and operational phases — a fact of particular significance to women and vulnerable groups who will enjoy improved opportunities and living standards given their greater access to potable water.

JOHN MAKWENDA CEO, Central Region Water Board, Malawi

Despite progress access to drinking water in Malawi remains highly uneven.

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The Dowa Town Water Supply Project is expanding and upgrading current systems to provide a clean, adequate and reliable water supply to the 150,000 people of Dowa Town and surrounding areas. These areas not only include the refugee camp but also the district hospital, both in urgent need of modern sanitation in the ongoing struggle against waterborne diseases. A loan with a total volume of just over US$30 million, of which the OPEC Fund is providing US$15 million, will finance the construction of a new pumping station, treatment plant, concrete tanks and communal water points. The project is set to improve water supply reliability from 8 to 24 hours per day, ensure water supply coverage to 100 percent of the local population (from the current level of just under half), while consistently meeting water quality standards. The project is part of ongoing efforts to improve health and living standards throughout the country and to achieve SDG 6 - Clean Water & Sanitation by 2030.

‘Thousands have lived without love, not one without water,’ wrote British poet W.H. Auden. Over the last 25 years, Malawi has made great progress in expanding access to safe water — but more remains to be done. Diarrhea causes well over 10 percent of deaths in children under 5, while women and children waste countless hours fetching clean water rather than working or studying. The OPEC Fund is playing a critical role via the Dowa Town Water Supply Project in saving and improving the lives of the local population.

SONIA SISEROVA Country Manager, Eastern & Southern Africa, Public Sector Operations, OPEC Fund

150,000 people

8 to 24 hours per day Improvement in water supply reliability

100 %

Expected water supply coverage of local population

Expected beneficiaries

POWERING PAKISTAN’S ENERGY TRANSITION

Energy drives development, but renewables are not only sustainable — they also help to achieve other global goals. In 2022, the OPEC Fund provided US$41 million to the energy sector in partner countries worldwide.

Stretching from the Pamir and Karakoram mountains in the north- west to the Arabian Sea in the south, Pakistan boasts a rich array of landscapes including valleys, plateaus and river plains. Thanks to its unique geography, it is blessed with rich water resources — and vast potential in hydropower. After a steep decline in the 1990s, hydropower is making a comeback, as the government is working hard to reduce its reliance on imported fossil fuels. The move will help the country meet its international climate commitments, as Pakistan aims to cut projected emissions by 50 percent while generating 30 percent of power via renewable energy by 2030. The Mohmand multipurpose dam, on the Swat River in the northwest of the country, will play a key role in meeting these targets. Supported with a US$72 million loan from the OPEC Fund, the dam will contribute reliable electricity for Pakistan’s entire population, and be connected to the grid for up to 4 hours per day during the dry season.

The Mohmand dam is a multipurpose project, which is likely to contribute significantly to water, food and energy security in Pakistan. As the fifth-highest concrete-faced rockfill dam in the world, Mohmand will help mitigate floods and irrigate more than 18,000 acres of land. The dam will contribute to the national grid 2.8 GWh per year of low-cost and environmentally friendly hydroelectricity, while providing 300 million gallons of water per day to Peshawar for drinking purposes. Estimated annual benefits of the project stand at 51.6 billion Pakistan rupees, around US$180 million.

LT. GEN. SAJJAD GHANI (RETD.) Chairman of Pakistan Water and Power Development Authority

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300 MN Gallons of drinking water per day supplied to Peshawar

2.8 GWh Power generated by the dam per year 18,000 acres Local land irrigated

The Mohmand multipurpose dam project aligns with the national priorities of the Pakistan Vision 2025 development strategy. The total project cost is US$2.2 billion, co-financed with the Islamic Development Bank, the Kuwait Fund for Arab Economic Development and the Saudi Fund for Development, while the government of Pakistan is contributing close to US$1 billion.

The Mohmand multipurpose dam is a good illustration of climate action, especially given last summer’s devastating floods across the country. The project has various objectives, some of which are linked to the climate challenge; it will generate clean energy, pro- vide a sustainable supply of water for irrigation and hu- man consumption, while also improving flood resilience. Construction is set to be completed by December 2026, by which time the dam will be able to relieve flood pressures by around 40 percent.

The surrounding Khyber Pakhtunkhwa region is Pakistan’s third largest in terms of population, with over 35 million people living mostly in rural areas but contributing only 10 percent to national GDP. Beyond the climate and energy benefits, the construction of irrigation canals will strengthen the agricultural potential of the region and create new business opportunities to improve livelihoods — rounding off a truly multipurpose project.

DRISS BELAMINE Country Manager, Asia & the Pacific, Public Sector Operations, OPEC Fund

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