SPECIAL FEATURE
The private sector, through financial institutions, is adept at providing a range of financial services, e ffi ciently allocating capital and managing risk. For real economy projects there are cases where a blend of private and public sector resources is required – for example in public-private partnership (PPP) structures. The OPEC Fund has experience in this respect too: In the case of the Central Térmica de Temane power plant in Mozambique the Private Sector Department financed a 450 MW power generating facility, while the Public Sector Department funded the related transmission infrastructure. While the private sector is pivotal in driving innovation and e ffi ciency in many areas of the economy, the public sector plays an indispensable role in ensuring access, equity and provision of public goods. The best outcomes often emerge from leveraging the strengths of both segments to complement each other. OFQ : Trade is an important part of the Private Sector Department’s o ff ering. How can the OPEC Fund further enhance and expand its activities at a time when global trade is increasingly under threat? TA: We see our role as integral in facilitating trade and its importance. Understanding the bottlenecks for global and regional trade in partner countries allows us to o ff er bespoke solutions, thus boosting trade. To date, we have facilitated over US$12 billion in support for international trade. The OPEC Fund is facilitating trade flows through several mechanisms, including direct financing of corporate entities and collaborating with commercial banks and other development finance institutions. The OPEC Fund shares in the risks of various trade finance products. The OPEC Fund has also supported its partners in short-term financing either directly or through regional and local commercial banks. We were among the first to finance the African agricultural trader, Export Trading Group (ETC Group), which also supports over 600,000 smallholder farmers in the region. We have also partnered with the International Islamic Trade Finance
OFQ : The OPEC Fund has financed projects in more than 125 countries worldwide. Do you see di ff erent approaches to the private sector and its role in the national economy among the main regions Africa, Asia and Latin America & the Caribbean? TA: Most private sector companies that we work with are focused on solving challenges by providing financial inclusion, building infrastructure and facilitating trade. They create value and employment, generate tax revenue for the government, earn foreign currency through their export activities and act as engines of economic growth. While landscapes and operating environments di ff er, our approach remains always: Finding solutions for our clients.
“We were among the first to finance the African agricultural trader Export Trading Group, which supports over 600,000 smallholder farmers in the region.”
Tareq Alnassar, Vice President, Private Sector, OPEC Fund
Corporation (ITFC) in financing strategic commodities into and from our beneficiary countries.
The European Bank for Reconstruction and Development (EBRD) has been an inspiration for us with its Trade Facilitation Programme and a strong partner for rolling out our own trade financing activities.
Photo: Ivan Bruno de M/Shutterstock
OFQ : Are there sectors where the private sector is particularly well-placed to deliver and – in reverse – do you see activities better served by the public sector? TA: The delineation between sectors where the private and public sectors are best suited to lead is crucial for e ffi cient and sustainable development. The private sector, with its agility, innovation and capital, is particularly well-placed in areas where market mechanisms can e ffi ciently drive growth and deliver services. Conversely, the public sector is essential in areas where public goods, equity and long-term societal welfare are the primary concerns.
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