OPEC Fund Quarterly - 2022 Q3

SPOTLIGHT

AND THE OPEC FUND Solar energy, for example, has attracted considerable attention from

Increasing private sector participation in

Port Said grain storage

the international community with large-scale development projects. The OPEC Fund invested US$114 million in the 200 MW capacity Kom Ombo solar plant , joining the European Bank for Reconstruction and Development (EBRD), the African Development Bank (AfDB), the Green Climate Fund (GCF) and Arab Bank. The plant will serve 130,000 households. In 2013, the OPEC Fund joined an international consortium of lenders to finance the Helwan South Power Project , which

infrastructure development

Said Taufik Ridh a , Director, Private Sector, Portfolio Management, says: “Infrastructure plays a crucial

role in achieving multiplier effects towards economic development as it drives productivity and job creation. The role of private sector participation in infrastructure development is key as the government cannot finance

Port Said Grain Facilities will boost food

security and reduce agricultural losses Increasing the capacity of grain storage facilities in Egypt has become an urgent priority, as the war in Ukraine is threatening global food security. Egypt is typically the world’s largest wheat importer, buying more than 60 percent of its wheat from abroad with Russia and Ukraine accounting for some 80 percent of those imports. A US$14 million loan from the OPEC Fund is financing the development of two major grain silos through the Port Said Grain Storage Facilities Project, which will increase storage capacity by 1.5 to 2 million tons of wheat grain each year and help reduce agricultural losses. Bolstering local businesses and creating employment Egypt’s rapid population growth represents an urgent challenge of creating sufficient employment. As the engines of economic growth, small and medium-sized enterprises account for over 45 percent of overall employment in Egypt. Following a US$25 million loan in 2009 and a US$40 million loan in 2015, in 2020 the OPEC Fund provided a US$95 million loan to Egypt’s Micro, Small and Medium Enterprise Development Agency (MSMEDA) supporting the creation of thousands of jobs and boosting self-employment, especially for women and youth.

this on its own. The OPEC Fund’s commitment towards Egypt’s infrastructure development through private sector participation is evidenced by our direct lending

included the development of a 1,950 MW supercritical steam technology power plant

fueled by natural gas and

for the Kom Ombo 200 MW solar photovoltaic

associated gas pipelines. The project will improve the stability of the power system and the reliability of electricity supply. “The impact of this power plant is very significant for Egypt,” says Mohamed Mokhtar, Chairman of the Board of Directors of the Upper Egypt Electricity Production Company. “It is a mega plant, one of the biggest in the Middle East, consisting of three supercritical units, each with a capacity of 650 MW, amounting to a total of 1,950 MW. In the aftermath of the political upheaval in 2011, the country suffered many power outages and Helwan South was instrumental in ensuring supplies.” The financing of the US$1.5 billion project brought together a line-up of international investors including the World Bank and members of the Arab Coordination Group such as the Islamic Development Bank, the Arab Fund and the Kuwait Fund. “It is impossible for the government or a single funding entity to undertake such a project alone. Undoubtedly, the role of international finance institutions is key to realize investments of such scale.”

SAID TAUFIK RIDHA

power plant and the term loan facility provided to National Bank of Egypt (NBE) which aligns well with Sustainable Development Goals (SDGs), such as SDG 7 (Affordable and Clean Energy), SDG 8 (Decent Work and Economic Growth) and SDG 9 (Industry, Innovation and Infrastructure).” The OPEC Fund signed a US$200 million loan agreement with the National Bank of Egypt (NBE), Egypt’s largest commercial bank, to finance the development of infrastructure projects. The financing package includes a US$150 million loan from the Asian Infrastructure Investment Bank (AIIB) and a US$50 million loan from the OPEC Fund and will help bridge the infrastructure funding gap in Egypt by leveraging NBE’s broad network. The OPEC Fund’s loan will be provided for on-lending to private sector companies in priority industries including the energy (particularly renewables), health and transportation sectors.