INTERVI EW
OFQ : How has the introduction of the Private Sector Department changed the OPEC Fund? TA: The Private Sector Department has been instrumental in contributing to the mandate of the OPEC Fund by providing much-needed financing for private sector borrowers in partner countries, which in most cases are not available through traditional commercial banks or the capital markets, complementing the scarce public sector resources in those countries.
financial institutions, which support microfinance and micro enterprises globally. As of December 2022, MEF had deployed over US$2.9 billion to 312 microfinance institutions in 64 countries. Similarly, MDBs including the OPEC Fund established the African Recapitalization Fund to inject equity into local African banks following the 2008 financial crisis to address the capital and liquidity needs of banks. Also, at the onset of the COVID-19 pandemic, we provided financing through Bank of Maldives to local SMEs severely impacted by the pandemic under our COVID-19 response initiative. We also assist in the OPEC Fund’s strategic initiatives, while contributing to the sustainability of the OPEC Fund. The private sector is contributing to the operational milestones, representing 30 percent of the resources and more than 40 percent of gross revenue of the OPEC Fund.
Photo: Mazur Travel/Shutterstock
OFQ : What role does the private sector play in the OPEC Fund’s Strategic Framework 2030? TA: Supporting the private sector and trade are operational priorities for us. We have deployed this support across several key concerns such as infrastructure and human capacity building, as well as cross-cutting themes including food security and climate action. We aim to be a catalyst for sustainable economic growth with a focus on projects that not only provide financial returns but also have a substantial positive impact on local communities. We have also supported greenfield industries in our beneficiary countries; i.e. the establishment of leasing companies in Sudan and Mauritania to provide access to financial products for this untapped segment. Several Private Sector Department projects have won global awards and we have been able to become partners in truly impressive success stories. One outstanding example was the financing of a small leasing company in Mauritania, which the OPEC Fund has supported with equity and loans. The leasing company subsequently evolved into the commercial bank Banque Populaire de Mauritanie, which is now one of the largest banks in Mauritania.
“Several Private Sector Department projects have won global awards and we have been able to become partners in truly impressive success stories.” Tareq Alnassar, Vice President, Private Sector, OPEC Fund
The Private Sector Department has also played a critical role in providing complementary financing in syndications of landmark projects globally. Our e ffi ciency and value added have made us a trusted co-financer of other multilateral development banks (MDBs) and major commercial banks. In times of global crises, such as pandemics or financial crises, the private sector has been quick to respond with financial assistance to a ff ected partners. This rapid response capacity underscores the OPEC Fund’s commitment to solidarity and support for its partners in times of need. Following the 2008 financial crises, the OPEC Fund 1 invested in the Microfinance Enhancement Facility (MEF) with other partners (IFC, KfW, OeEB) in response to the liquidity challenges faced by microfinance institutions to provide financing to
1 The OPEC Fund exited MEF in December 31, 2022 having achieved excellent development outcomes over a 13-year period.
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