Development Effectiveness Report 2023

2023

EFFECTIVENESS DEVELOPMENT

REPORT

THE OPEC FUND for International Development

opecfund.org

TABLE OF CONTENTS

Message from the OPEC Fund President

Executive Summary

CHAPTER 1 Background

CHAPTER 2 The OPEC Fund and the Sustainable Development Goals

CHAPTER 3 Spotlight on SDG 2: Food Security, Agriculture and Rural Development 32

CHAPTER 4 OPEC Fund Project Results

CHAPTER 5 Implementing the OPEC Fund Development Results Framework

CHAPTER 6 Looking Ahead

ANNEX 1. Organizational chart of the OPEC Fund

2. Additional detail on the OPEC Fund’s SDG contribution analysis

3. OPEC Fund Results Data, Methodology and Limitations

List of Acronyms

INTRODUCTION

MESSAGE FROM THE OPEC FUND PRESIDENT

Dear Reader,

On behalf of the OPEC Fund for International Develop- ment, I am proud to present our second Development Effectiveness Report. In this review we examine the world- wide impact of our projects, in line with our vision to make “sustainable development a reality for all.” The report de- picts encouraging progress, which serves as a powerful impetus to continue along our chosen path. Examining the period from July 2022 to June 2023, the re- port finds that all 43 projects approved by the OPEC Fund during that interval contributed to at least one Sustainable Development Goal (SDG), with a majority (60 percent) contributing to two or more. On average, each approved project contributed to 2.7 SDGs, with a maximum of 10 SDGs (of 17) achieved by one project, a policy-based loan in Armenia. A breakdown shows that a majority of the ex- amined projects contributed to SDG 8 - Decent Work and Economic Growth - through a variety of channels, for in- stance providing support to increase access to finance for micro, small and medium-sized enterprises and to policy reforms to foster sustainable economic growth. The front- runner was followed by SDG 9 - Industry, Innovation and In- frastructure - and then SDG 1 - No Poverty. As most of our

projects address multiple goals, our work is clearly much more than the sum of its parts — similar to the UN 2030 Agenda itself.

In addition to tallying up the expected SDG alignment of new projects, the report also looks back at actual achievements. A review of all OPEC Fund operations that have either reached completion or early operating matu- rity during the mid-2022 to mid-2023 period finds that these projects have delivered important results: Around 15.7 million people gained improved access to healthcare, more than 1 GW in renewable energy capacity was installed, while more than 300,000 farmers, 120,000 students and 4,600 MSMEs benefited through projects in various sectors. Through our Strategic Framework 2030, we are deepening our impact by growing and enhancing our operations to address the rising demand for South-South development cooperation. With the creation of our Development Effec- tiveness Unit, we have gathered a group of experts to train and support our Operations teams in planning and imple- menting projects that maximize results.

INTRODUCTION

In this review we examine the

WORLDWIDE IMPACT of our projects, in line with our vision to make “sustainable development a reality for all.”

The response to this new drive for greater impact has been encouraging and early results and cooperation have confirmed that we are on the right track. As we approach the midway mark of our Strategic Framework, we are pre- paring the next steps: Throughout 2024, the OPEC Fund will continue to pilot and test the indicators of its results framework ahead of their public launch, set for 2025. In addition to taking stock of the OPEC Fund’s develop- ment results and effectiveness, the report also examines food security as a key challenge for the international com- munity. As flagged by the recent mid-term review of the 2030 Agenda, the latest trends are cause for concern: after years of good progress, the number of people going hun- gry today is higher than in 2015 — when the Sustainable Development Agenda was adopted. The reasons for this reversal are numerous and can be found in recent geopolitical events, the impact of the COVID-19 pandemic and countries’ capacity for agricultural self-sufficiency. The causes are as complex as the impacts. But for the OPEC Fund as a development institution, one simple truth stands above all else: If people go hungry it

is impossible to achieve progress on any other develop- ment goal. The OPEC Fund has therefore long focused on agriculture and rural development as drivers for develop- ment and poverty reduction, and has been implementing a US$1 billion Food Security Action Plan to address the recent spike in food insecurity in its partner countries. The OPEC Fund searches for solutions and takes action to address the most pressing challenges of our time. With the focus on development effectiveness we have enhanced our toolkit. Our goal with this report is to show how we are putting our commitment into practice.

ABDULHAMID ALKHALIFA

President The OPEC Fund for International Development

INTRODUCTION

EXECUTIVE

SUMMARY

The OPEC Fund for International Development achieved a signifi- cant milestone with the publica- tion of its inaugural Development Effectiveness Report during the OPEC Fund Development Forum in June 2023. This year’s edition

areas, with most earning their living from subsistence farming. Smallholder farmers encounter significant barriers to improving productivity, including insecure land tenure, worsening effects of climate change and restricted

15.7 MN people gained improved access to healthcare

takes stock of progress made since last year’s report and introduces a new feature which focuses in detail on a par- ticular development issue: starting with food security under SDG 2 - Zero Hunger. The OPEC Fund’s commitment to advancing the SDGs is evi- dent in this comprehensive review of projects approved from July 2022 to June 2023. The analysis found that all approved projects during this period aligned with at least one SDG, with 60 percent of projects supporting two or more goals. The goal most frequently supported by OPEC Fund opera- tions was SDG 8 - Decent Work and Economic Growth, with 72 percent of projects contributing, such as by supporting in- creased access to finance for micro, small and medium-sized companies or policy reforms for sustainable economic de- velopment. SDG 9 - Industry, Innovation and Infrastructure and SDG 1 - No Poverty were the second- and third-most supported goals. Overall, projects approved during the re- view period are expected to contribute to all 17 SDGs. Beginning with this issue, the Development Effectiveness Report highlights specific aspects of development within the context of the SDGs. The focus this year is on SDG 2 - Zero Hunger, and food security in particular. Food secu- rity is closely linked to agriculture and rural development since around three-quarters of the world’s poor live in rural

market access. In addition to structural constraints to agri- cultural productivity, food prices and supply have also been severely affected by the COVID-19 pandemic and the war in Ukraine, further exacerbating food insecurity and poverty in many OPEC Fund partner countries around the world. Support to agriculture, rural development and food secu- rity has long been an important focus of the OPEC Fund given the pivotal role these sectors play in inclusive eco- nomic growth and improved livelihoods. Since its inception in 1976, the OPEC Fund has committed over US$3.5 billion in loans (15 percent of total commitments) to food security projects. Furthermore, the recent US$1 billion Food Secu- rity Action Plan (FSAP), launched in response to the effect the war in Ukraine has had on global food supplies, under- scores our commitment to addressing immediate, medium, and long-term food security needs. By October 2023, the OPEC Fund had approved US$547 million for 16 projects under the FSAP, highlighting its rapid and impactful re- sponse to the urgent challenges facing partner countries, with a collaborative approach involving key institutions such as the World Bank and International Fund for Agricul- tural Development (IFAD).

The report also presents a comprehensive analysis of the development results of the OPEC Fund’s 23 non-trade

INTRODUCTION

The OPEC Fund’s main strategic objective is to

MAXIMIZE DEVELOPMENT IMPACT.

and 15 trade finance operations, which had either been complet- ed or reached early operating maturity (EOM) between July 2022 and June 2023. These projects delivered major devel- opment benefits: 15.7 million

project-level toolkit as well as a corporate results framework with indicators across four levels. The use of this OFRF project-level toolkit, which en- hances the documentation of development results and stra-

1,077 MW of renewable energy capacity were installed

people gained improved access to healthcare, 346,620 farmers received support, 127,939 students benefited from education projects, US$341 million was facilitated in trade, and 1,077 MW of renewable energy capacity was installed. While aggregate numbers help us understand the scale of impact, they nevertheless provide an incomplete picture. To contextualize the results, our report presents several case studies of projects that had either been completed or reached EOM during the review period. These include an urban infrastructure improvement project in Nepal which augmented storm drains, sewerage systems and roads, as well as the upgrade of two Ugandan hospitals to regional referral hospitals which significantly improved access to a broader range of healthcare services for 3.9 million people. Another example is the provision of a loan to a Honduran financial intermediary which has contributed to the borrower significantly expanding its lending activities to small and medium-sized enterprises (SMEs). In 2023, the OPEC Fund prioritized the implementation of the OPEC Fund Results Framework (OFRF). Approved in 2022, the OFRF provides a structured approach to track- ing and communicating development results, as well as to integrating development effectiveness considerations into strategic and investment decisions. It consists of a

tegic alignment of OPEC Fund operations, became man- datory in early 2023. The Development Effectiveness Unit (DEU) collaborated closely with project teams to ensure the toolkit’s consistent application, providing input, feed- back, validation and training. The OPEC Fund also continued to test and pilot the ag- gregate OFRF indicators and their data availability and quality. The lessons learned on data collection since 2022 as well as the upcoming update of the OPEC Fund’s strat- egy will serve as the basis for refining the OFRF indicators ahead of their public launch, which is planned for 2025. The OPEC Fund’s main strategic objective is to maximize development impact. The insights generated by focusing on development effectiveness are crucial, especially since they illuminate the extent to which the OPEC Fund advanc- es toward this goal. This knowledge allows the OPEC Fund to be accountable to its stakeholders and to apply the lens of development effectiveness to all its decision-making. This Development Effectiveness Report highlights some of the progress made, with much more yet to come. Future issues of our annual Development Effectiveness Report will provide an ever more complete picture of how the OPEC Fund is maximizing development impact, in line with its mandate.

CHAPTER 1

BACKGROUND To date, the OPEC Fund has committed about US$26 billion of its loan and grant resources to over 4,000 projects in 125 partner countries worldwide with a total project value of over US$200 billion.

CHAPTER 1

BACKGROUND

In June 2023, the OPEC Fund for International Development (see box) published its first Development Effectiveness Report. 1 Launched at the OPEC Fund’s 2023 Development Forum, the report marked an important milestone in the OPEC Fund’s journey toward reaching its strategic objec- tives of increased relevance and impact. In line with its growing emphasis on impact, the OPEC Fund has enhanced the way it assesses and tracks the develop- ment effectiveness of the operations it supports. To comple- ment the development effectiveness toolkit applied to new operations, the annual Development Effectiveness Reports provide a summary of the main results achieved by imple- mented operations in the OPEC Fund’s portfolio. Similar to last year’s report, the 2023 Development Effectiveness Report continues to take stock of progress made and knowledge generated on the development results of the OPEC Fund’s activities. The report was prepared by the OPEC Fund’s Development Effectiveness Unit, which is separate from the OPEC Fund’s operational departments and provides guidance and oversight on development effec- tiveness matters. This report provides an update of the results completed projects have achieved since the cutoff date of last year’s Development Effectiveness Report. It also provides an over- view of the SDG alignment of projects approved since the stocktaking exercise. A new feature of this report is an in- depth look at the most pressing development problems: In this year’s report, we put a spotlight on SDG 2 - Zero Hunger and examine the fundamental issue of food security.

ABOUT THE OPEC FUND FOR INTERNATIONAL DEVELOPMENT

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 about US$26 billion of its loan and grant resources to over 4,000 projects in 125 partner countries worldwide with a total project value of over US$200 billion. In the regional dis- tribution of commitments, Africa stands at 49 percent, followed by Asia at 29 percent and Latin America & the Caribbean at 15 percent. The OPEC Fund provides fi- nancing 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 develop- ment. SCR resources are used to provide funding at more concessional terms to lower-income countries.

1 https://publications.opecfund.org/view/319943701/

CHAPTER 1

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

Council — is responsible for the conduct of the OPEC Fund’s general operations. The Governing Board additionally over- sees the OPEC Fund’s activities through four sub-commit- tees (Audit & Risk, Budget & Strategy, Development Effec- tiveness, and Ethics). The OPEC Fund Management is headed by Dr. Abdulhamid Alkhalifa, who 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, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, United Arab Emirates and Venezuela). Its supreme authority is the Minis- terial 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 Finan- cial Statements. The OPEC Fund also publishes a quarterly magazine dedicated to questions of development and sus- tainability.

The OPEC Fund’s Governing Board usually meets four times a year and — subject to directives issued by the Ministerial

CHAPTER 2

THE OPEC FUND AND THE SUSTAINABLE DEVELOPMENT GOALS Committed to contributing to the achievement of the SDGs.

CHAPTER 2

THE OPEC FUND AND THE

SUSTAINABLE

DEVELOPMENT GOALS

The OPEC Fund is committed to contributing to the achieve- ment of the Sustainable Development Goals (SDGs). For this edition of the annual Development Effectiveness Report, the OPEC Fund conducted a review of all operations approved from July 2022 to June 2023 2 to assess delivery on this com- mitment. The mid-2023 cutoff was chosen to analyze one full year of approvals since last year’s report. The review found that all OPEC Fund-approved projects in that period contribute to at least one SDG, with a majority (60 percent) supporting two or more goals. On average, each approved project is expected to contribute to 2.7 SDGs, with one pro- ject benefitting 10 SDGs 3 ( Figure 1 ).

Overall, OPEC Fund operations approved during the analysis period contribute to all SDGs (Figure 2) .

Figure 2: SDGs contributed to by OPEC Fund operations approved July 2022 to June 2023

Figure 1: Number of SDGs supported per project approved from mid-2022 to mid-2023

Nr. of SDGs per project

2 All 43 loan projects approved from July 2022 to June 2023 were assessed for SDG alignment. To do so, each project’s objective, description and targets/ex- pected development outputs and outcomes were mapped and the applicable 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. 3 The one project supporting 10 SDGs is a policy-based loan project to Armenia which supported green inclusive and sustainable development. It is expected to contribute to SDGs 1, 3, 4, 7, 10, 11, 12, 13, 16 and 17. 4 In addition to the projects approved individually, the OPEC Fund also issued US$802 million in numerous short-term trade finance guarantees under risk-shar- ing facilities during the period. This guarantee program, while not included in the analysis, is also thought to contribute to SDG 8 by fostering economic growth through trade.

Nr. of projects

CHAPTER 2

TWO OR MORE GOALS. July 2022 to June 2023 contribute to at least one SDG, with a majority (60 percent) supporting The review found that all OPEC Fund-approved projects in the period from

SDG 8 - Decent Work and Economic Growth is the top goal that reviewed OPEC Fund operations are expected to con- tribute to; 31 projects (72 percent of all reviewed) specifi- cally reflect the OPEC Fund’s strong support for economic growth and development (Figure 3) . 4 There is a wide vari- ety of projects aligning with this SDG, most notably in the banking sector (13 of the 31) to enable access to finance for MSMEs and international trade. This is followed by pol- icy-based loans (6 of 31), multisector (4 of 31) and agricul- ture (3 of 31) projects. The second and third leading goals were SDG 9 - Industry, Innovation and Infrastructure with 26 percent of projects contributing, followed by SDG 1 - No Poverty with 23 percent of projects contributing. For all SDG contributions, see Figure 3 below and Tables 1–17 overleaf.

Figure 3: Number of projects contributing to each SDG

SDGs

SDG 8

SDG 9

SDG 1

SDG 13

SDG 7

SDG 5

SDG 3

SDG 2

SDG 17

SDG 4

SDG 11

SDG 15

SDG 16

SDG 12

SDG 10

SDG 6

SDG 14

Nr. of projects

Note: The analysis covered the 43 projects approved between July 2022 and June 2023. Numbers sum to more than the total number of projects as most operations contribute to more than one SDG.

CHAPTER 2

A number of concrete targets constitute, and further specify, the scope of each SDG. To provide a better understanding of the areas supported by OPEC Fund-financed projects, the following paragraphs show expected project contributions by specific SDG targets. The total number of projects con- tributing to the targets under each SDG can sum to more than the total number of projects per goal. This is because projects often contribute to more than one SDG target. Under SDG 1 - No Poverty, OPEC Fund operations approved between July 2022 and June 2023 will mainly help develop irrigation systems in low-income communities, implement social protection systems and climate-resilient initiatives that

benefit poor families, and increase access to basic services (Table 1) . A US$40 million loan to the Republic of Mauritania, for example, will provide permanent and sustainable potable water to villages and rural settlements that currently do not have access to a reliable source of water, thus contributing to the provision of access to basic services (target 1.4). An- other project contributing to SDG 1 is a US$20 million loan to the Kingdom of Eswatini for poverty reduction through, among the provision of other goods and services, the devel- opment of irrigation schemes which are not only expected to increase agricultural productivity and incomes of poor farmers, but also to create employment both during their construction and operation.

Table 1: Project contributions to SDG 1

Nr. of contributing projects

% of contributing projects

SDG target

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 1

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

1.4 By 2030, ensure that all men and women, in particular the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership and control over land and other forms of property, inheri- tance, natural resources, appropriate new technology and financial services, including microfinance 3 1.5 By 2030, build the resilience of the poor and those in vulnerable situations and reduce their exposure and vulnerability to climate-related extreme events and other economic, social and environmental shocks and disasters 2 1.a Ensure significant mobilization of resources from a variety of sources, including through enhanced development cooperation, in order to provide adequate and predict- able means for developing countries, in particular least developed countries, to implement programs and policies to end poverty in all its dimensions 5

12%

CHAPTER 2

Under SDG 2 - Zero Hunger, the highest number of projects contribute to targets 2.a and 2.1 (Table 2) . In line with the nature of SDG 2, OPEC Fund-supported projects aligning to this goal typically focus on sustainably improving pro- ductivity, practices and incomes in the agriculture sector, as well as more broadly supporting rural development and food security. SDG 2-aligned projects approved during the reporting period include, for example, a ¤70 million

policy-based loan to the Republic of Cote d’Ivoire that in- cludes undertaking a study on the costs of malnutrition, the adoption of a national micronutrient survey, and the establishment of a national social safety net program. Another relevant operation is a US$150 million project in Colombia that aims to promote climate-smart agriculture by increasing the utilization of sustainable cattle-raising systems.

Table 2: Project contributions to SDG 2

Nr. of contributing projects

% of contributing projects

SDG target

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 4

2.2 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 2 2.4 By 2030, ensure sustainable food production systems and implement resilient agricultural practices that increase productivity and production, that help maintain ecosys- tems, that strengthen capacity for adaptation to climate change, extreme weather, drought, flooding and other disasters and that progressively improve land and soil quality 2

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

CHAPTER 2

Most projects supporting SDG 3 - Good Health and Well- being aim to improve health outcomes by upgrading health- care infrastructure or services. Projects approved since mid- 2022 that support SDG 3 include a US$30 million loan to help the government of St. Vincent and the Grenadines build and equip a 134-bed new acute care hospital with trauma, acute surgery, urgent, critical and outpatient care. In addition, the hospital is designed to provide the full range of health ser-

vices required to support diagnostic, treatment and rehabili- tative interventions including medical laboratory technology, radiography, pharmacy, audiology, optometry, physical thera- py, psychology and social work. Another example of a project aligned to this goal is a US$100 million loan to the Repub- lic of India that is expected to reduce the number of road traffic injuries by constructing a road that can accommodate increased traffic and addresses congestion and bottlenecks.

Table 3: Project contributions to SDG 3

Nr. of contributing projects

% of contributing projects

SDG target

3.3 By 2030, end the epidemics of AIDS, tuberculosis, malaria and neglected tropical diseases and combat hepatitis, water-borne diseases and other communicable diseases 1

3.6 By 2020, halve the number of global deaths and injuries from road traffic accidents

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 2

3.9 By 2030, substantially reduce the number of deaths and illnesses from hazardous chemicals and air, water and soil pollution and contamination 2

CHAPTER 2

Under SDG 4 - Quality Education, OPEC Fund projects are mainly expected to contribute to target 4.a (Table 4) by sup- porting the provision, expansion and improvement of edu- cation infrastructure. Projects approved since mid-2022 that support this goal include a US$50 million loan to expand and strengthen the capacity of the existing vocational education

system in China by developing secondary vocational educa- tion infrastructure in Hunan Province to deliver market-ori- ented education for about 5,000 young job seekers per year. Another example is a ¤50 million policy-based loan to the Republic of Armenia that includes actions to introduce a new competency-based curriculum for all schools in Armenia.

Table 4: Project contributions to SDG 4

Nr. of contributing projects

% of contributing projects

SDG target

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

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

4.7 By 2030, ensure that all learners acquire the knowledge and skills needed to promote sustainable development, including, among others, through education for sustain- able development and sustainable lifestyles, human rights, gender equality, promotion of a culture of peace and non-violence, global citizenship and appreciation of cul- tural diversity and of culture’s contribution to sustainable development

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 4

4.c By 2030, substantially increase the supply of qualified teachers, including through international cooperation for teacher training in developing countries, especially least developed countries and small island developing States

CHAPTER 2

Under SDG 5 - Gender Equality, OPEC Fund projects are main- ly expected to contribute to target 5.5 (Table 5) by support- ing the full participation of women in economic life. Projects approved between mid-2022 and mid-2023 include a US$20 million loan for Access Bank Botswana to expand access to finance by women-led MSMEs which are financially under- served. Similarly, a US$35 million loan and US$1.5 million

grant package to the government of Madagascar for the Na- tional Clean Cooking Transition program includes a women’s empowerment and capacity building component focused on female entrepreneurship, women’s health education and stimulation of economic opportunities. In addition to SDG 5, this project also aligns to the OPEC Fund’s cross-cutting stra- tegic themes of climate action and food security.

Table 5: Project contributions to SDG 5

Nr. of contributing projects

% of contributing projects

SDG target

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

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

12%

5.a Undertake reforms to give women equal rights to eco- nomic resources, as well as access to ownership and control over land and other forms of property, financial services, inheritance and natural resources, in accordance with national laws 1

The main SDG 6 - Clean Water and Sanitation target support- ed by reviewed OPEC Fund projects is 6.1 (Table 6) . Typical- ly, projects supporting this goal aim to expand access to safe drinking water and sanitation, as well as to improve water ef- ficiency and wastewater treatment. One example is a US$70 million policy-based loan to the Republic of Cote d’Ivoire, which included prior actions to improve access to social infra-

structure, including the adoption of a revised water code, and the refinement of the national strategy for the management and maintenance of drinking water infrastructure in rural areas. Another project is a US$40 million loan to the Islamic Republic of Mauritania to provide a permanent, sustainable and quality potable water supply from the Senegal River for the City of Kiffa and a number of nearby villages and rural settlements.

Table 6: Project contributions to SDG 6

Nr. of contributing projects

% of contributing projects

SDG target

6.1 By 2030, achieve universal and equitable access to safe and affordable drinking water for all

CHAPTER 2

SDG 7 - Affordable and Clean Energy has traditionally been a strong focus area of the OPEC Fund, as reliable and sustainable access to energy is a key enabler for develop- ment. Target 7.1 is the main area supported by OPEC Fund projects analyzed in this edition of the report (Table 7) . Recently approved examples include a US$25 million loan to Niger for building three solar PV plants with a

total of 40 MW peak capacity generation, constructing 2,687 km of new transmission lines to connect numerous cities throughout the country, connecting 111,864 new sub- scribers to the national electricity grid, as well as joining 1,877 households to solar mini-grids. Another example is a US$20 million loan to Uzbekistan to develop a 500 MW wind farm.

Table 7: Project contributions to SDG 7

Nr. of contributing projects

% of contributing projects

SDG target

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

14%

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 2

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

CHAPTER 2

SDG 8 - Decent Work and Economic Growth is predom- inantly supported by projects that aim to expand ac- cess to finance via financial institutions and the provi- sion of trade finance, addressing target 8.10 in particular (Table 8) . Projects approved since mid-2022 that back this goal include a ¤50 million loan to the Banque Ouest

Africaine de Developpement to provide sub-loans to SMEs and for green energy projects in Africa Region. Another project example is a US$30 million loan to The City Bank Limited to increase access to trade finance in Bangladesh, in particular for commodities such as sugar, maize and soybeans.

Table 8: Project contributions to SDG 8

SDG target

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

14%

8.2 Achieve higher levels of economic productivity through diversification, technological upgrading and innova- tion, including through a focus on high-value added and labour-intensive sectors 1 8.3 Promote development-oriented policies that support pro- ductive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterpris- es, including through access to financial services 6 8.4 Improve progressively, through 2030, global resource efficiency in consumption and production and endeav- our to decouple economic growth from environmental degradation, in accordance with the 10‑Year Framework of Programmes on Sustainable Consumption and Production, with developed countries taking the lead 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 3

14%

8.6 By 2020, substantially reduce the proportion of youth not in employment, education or training 2

8.10 Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance and financial services for all 14

33%

CHAPTER 2

The main targets that reviewed OPEC Fund operations contribute to under SDG 9 - Industry, Innovation and Infrastructure were 9.a and 9.3 (Table 9) given the institution’s strong support to infrastructure and MSME finance. Projects approved since 2022 in support of SDG 9 include, for example, a US$15 million loan to Kyrgyzstan

for the reconstruction and upgrade of a 93-km road in the northwestern part of the country to improve safety and reduce travel times. Another project example is a US$262.5 million loan to Republic of Senegal to build the 2000-km Dakar – Saint Louis highway to reduce travel times and improve road quality.

Table 9: Project contributions to SDG 9

Nr. of contributing projects

% of contributing projects

SDG target

9.1 Develop quality, reliable, sustainable and resilient infra- structure, including regional and transborder infrastruc- ture, 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 3

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 coun- tries and small island developing States

12%

CHAPTER 2

Under SDG 10 - Reduced Inequality, key areas of the OPEC Fund’s support are target 10.1, which focuses on helping increase and sustain income growth for lower-income segments, as well as target 10.4 for the adoption of fiscal, wage and social protection policies (Table 10) . Projects approved since mid-2022 include a US$70 million loan to the Republic of Côte d’Ivoire for the Economic and Social Reform Support Program (PARES Phase III) which aims to

increase the allocation of public resources to disadvan- taged populations by strengthening the efficiency and transparency of public spending. Another project contrib- uting to SDG 10 is a ¤50 million policy-based loan to the Republic of Armenia that includes the promotion of inclu- sive development in the country by, for example, increas- ing the share of transfers to the bottom income quintile of the population from 50 percent to 75 percent.

Table 10: Project contributions to SDG 10

SDG target

Nr. of contributing projects

% 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 higher than the national average 2

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

10.4 Adopt policies, especially fiscal, wage and social protec- tion policies, and progressively achieve greater equality 2

Four OPEC Fund projects approved between mid-2022 and mid-2023 support SDG targets 11.2 and 11.6 (Table 11) . One project that aligns with target 11.2 is a US$47 million loan to the Republic of Uzbekistan that consists of the reconstruc- tion and upgrading of a road with bypasses to reduce acci- dents, congestion and pollution in urban settlements in the

project area. A target 11.6-supporting project is the US$50 million policy-based loan to the Republic of Armenia which includes a prior action to establish a framework for monitor- ing atmospheric air pollution and greenhouse gas emissions. These data are expected to be shared with the public, con- sistent with climate, health, social and welfare needs.

Table 11: Project contributions to SDG 11

SDG target

Nr. of contributing projects

% of contributing projects

11.2 By 2030, provide access to safe, affordable, accessible and sustainable transport systems for all, improving road safety, notably by expanding public transport, with special atten- tion to the needs of those in vulnerable situations, women, children, persons with disabilities and older persons

11.6 By 2030, reduce the adverse per capita environmental impact of cities, including by paying special attention to air quality and municipal and other waste management 2

CHAPTER 2

Two OPEC Fund projects examined in this report contribute to SDG 12 - Responsible Consumption and Production (Table 12) . A US$25 million loan to the Republic of Niger aids the development of a solar plant and the expansion of electricity access, including the development of technical studies on the electrification

in decentralized systems of green mini-grids and on the manufacture and dissemination of solar cookers as clean cooking options. The other operation is a US$50 million policy-based loan to the Republic of Armenia which in- cludes a prior action on climate risk screening for public investment decisions.

Table 12: Project contributions to SDG 12

Nr. of contributing projects

% of contributing projects

SDG target

12.7 Promote public procurement practices that are sustain- able, in accordance with national policies and priorities

12.a Support developing countries to strengthen their scientific and technological capacity to move towards more sustain- able patterns of consumption and production 1

Under SDG 13 - Climate Action, targets 13.1 and 13.2 (Table 13) are the highlights for the OPEC Fund during the timeframe of the report. One example of promoting renewable energy and climate action includes a US$20 million policy-based loan in Seychelles that lays the groundworks for ensuring that planning decisions are informed by an analysis of natural

hazard and climate risks. Another example is a US$100 million policy-based loan to the Republic of Paraguay that integrates climate change measures into the country’s mo- bility strategy (electrification of transport), water resources law (protection of water resources), and energy production policy (sustainable certified biomass).

Table 13: Project contributions to SDG 13

Nr. of contributing projects

% of contributing projects

SDG target

13.1 Strengthen resilience and adaptive capacity to climate-re- lated hazards and natural disasters in all countries 3

13.2 Integrate climate change measures into national policies, strategies and planning 8

19%

13.b Promote mechanisms for raising capacity for effective climate change-related planning and management in least developed countries and small island developing States, including focusing on women, youth and local and margin- alized communities

CHAPTER 2

Our analysis found that one OPEC Fund project aligns to three different targets within SDG 14 - Life below Water (Table 14) . This US$20 million policy-based loan to the Seychelles promotes sustainable fishing by increasing the

number of registered aquaculture businesses, reducing the percentage of infractions to the Mahe Plateau Regu- lations, and increasing the number of patrols monitoring the area of the project.

Table 14: Project contributions to SDG 14

Nr. of contributing projects

% of contributing projects

SDG target

14.4 By 2020, effectively regulate harvesting and end over- fishing, illegal, unreported and unregulated fishing and destructive fishing practices and implement science-based management plans, in order to restore fish stocks in the shortest time feasible, at least to levels that can produce maximum sustainable yield as determined by their biolog- ical characteristics 1

14.6 By 2020, prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, elimi- nate subsidies that contribute to illegal, unreported and unregulated fishing and refrain from introducing new such subsidies, recognizing that appropriate and effective special and differential treatment for developing and least developed countries should be an integral part of the World Trade Organization fisheries subsidies negotiation 14.7. By 2030, increase the economic benefits to small island developing States and least developed countries from the sustainable use of marine resources, including through sustainable management of fisheries, aquaculture and tourism

CHAPTER 2

Four of the analyzed OPEC Fund projects contribute to a vari- ety of targets within SDG 15 - Life on Land (Table 15) . Projects approved within the analysis period include a US$150 million operation in Colombia that aims to foster sustainable land use by increasing the number of hectares of land using sustaina-

ble conservation systems (restoration, agroforestry systems, and sustainable forest management). Another example is the US$35 million loan to the Republic of Madagascar to reduce the reliance on wood and charcoal for cooking purposes, thus protecting the country’s forests and unique ecosystem.

Table 15: Project contributions to SDG 15

Nr. of contributing projects

% of contributing projects

SDG target

15.1 By 2020, ensure the conservation, restoration and sustain- able use of terrestrial and inland freshwater ecosystems and their services, in particular forests, wetlands, moun- tains and drylands, in line with obligations under interna- tional agreements 1 15.2 By 2020, promote the implementation of sustainable man- agement of all types of forests, halt deforestation, restore degraded forests and substantially increase afforestation and reforestation globally 2 15.3 By 2030, combat desertification, restore degraded land and soil, including land affected by desertification, drought and floods, and strive to achieve a land degrada- tion-neutral world 1

15.b Mobilize significant resources from all sources and at all levels to finance sustainable forest management and provide adequate incentives to developing countries to advance such management, including for conservation and reforestation

CHAPTER 2

Two OPEC Fund projects contribute to SDG target 16.6 (Table 16) , which aims to ensure effective and transparent institutions. One of these projects is the ¤50 million policy- based loan to the Republic of Armenia which features, among other actions, the implementation of anti-corruption and jus- tice sector strategies. The other project is a US$20 million

policy-based loan to the Republic of Seychelles that includes the implementation of policies that will require state-owned enterprises to publish their annual reports. All these actions are expected to help ensure the broader SDG 16 - Peaceful and Inclusive Societies objective of promoting accountable and inclusive institutions at all levels.

Table 16: Project contributions to SDG 16

SDG target

Nr. of contributing projects

% of contributing projects

16.6 Develop effective, accountable and transparent institu- tions at all levels

Six OPEC Fund projects approved in the analysis window support the very broad SDG 17 - Partnerships which aims to foster Global Partnerships for Sustainable Development. Half of these projects contribute to target 17.3, which concerns the mobilization of additional financial resources for devel- oping countries from multiple sources. Projects contribut- ing to this target include a US$38 million syndicated loan to

Unique Meghnaghat Power Limited for the construction of a combined cycle LNG power plant in partnership with finan- ciers such as DEG, AIIB and Standard Chartered. Another example is a US$20 million loan in favor of a special purpose vehicle incorporated by ACWA Power to develop a 500 MW wind farm in the Bukhara Region of Uzbekistan that included financiers such as EBRD, ADB, DEG and Proparco.

Table 17: Project contributions to SDG 17

Nr. of contributing projects

% of contributing projects

SDG target

17.1 Strengthen domestic resource mobilization, including through international support to developing countries, to improve domestic capacity for tax and other revenue collection

17.3 Mobilize additional financial resources for developing coun- tries from multiple sources 3

17.14 Enhance policy coherence for sustainable development

CHAPTER 2

Adding to the analysis performed for last year’s Development Effectiveness Report, Figure 4 (below) shows the number of oper- ations contributing to each SDG for all projects approved between the beginning of 2018 and mid-2023 (the cutoff for this year’s Development Effectiveness Report).

Figure 4: Contributing projects per SDG for projects approved 2018 to mid-2023

220

152

17 13

18 10

Note: The analysis covered the 318 projects approved between 2018 and mid- 2023. Numbers sum to more than the total number of projects because most projects contribute to more than one SDG.

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