OPEC Fund Annual Report 2020
ANNUAL REPORT 2020
TOGETHER WE DRIVE DEVELOPMENT, STRENGTHEN COMMUNITIES & EMPOWER PEOPLE
ANNUAL REPORT 2020
TOGETHER WE DRIVE DEVELOPMENT, STRENGTHEN COMMUNITIES & EMPOWER PEOPLE
Table of contents
1. T HE OPEC FUND
About the OPEC Fund
8-9
The OPEC Fund’s global footprint
10-11
Director-General’s foreword
12-13
Strategic Framework 2030
14-15
The OPEC Fund and COVID-19
17
Approvals for COVID-19-related
18-21
operations in 2020 Partnerships
22-24
Highlights
26-27
4
THE OPEC FUND FOR INTERNATIONAL DEVELOPMENT
Annual Report 2020
2. OPERATIONAL HIGHLIGHTS
3. OTHER
INFORMATION
Ministerial Council
54
Operational highlights
30-33
The OPEC Fund and the
34-35
Governing Board
55
Sustainable Development Goals Case study: The OPEC Fund Annual Award for Development Other operational case studies
OPEC Fund committees
56
36-39
Statement of contributions
58-59
to OPEC Fund Glossary
40-46
60
OPEC Fund commitments
48-50
Copyrights
61
during 2020
CHAPTER 1
THE OPEC FUND
THE OPEC FUND
OUR MISSION: TOGETHER WE DRIVE DEVELOPMENT, STRENGTHEN COMMUNITIES AND EMPOWER PEOPLE.
OUR VISION: A WORLD WHERE SUSTAINABLE DEVELOPMENT IS A REALITY FOR ALL.
THE OPEC FUND FOR INTERNATIONAL DEVELOPMENT
Annual Report 2020
About the OPEC Fund
The OPEC Fund has sharpened its focus on development impact, strengthening its position to deliver ever more responsively to the changing needs of partner countries, and improving its contribution to the SDGs. We provide public, private and trade sector financing, as well as grants, to support sustainable development. To date, we have approved more than $25bn for operations in over 125 partner countries. More than $600m of this total is grant funding. Our work aligns with the Global Partnership for Effective Development Cooperation and the four shared principles of development: ownership of development priorities by developing countries; a focus on results; inclusive partner- ships; and transparency and accountability.
The OPEC Fund for International Development (the OPEC Fund) is a multilateral development finance institution established in 1976.
Our 12 Member Countries are: Algeria, Ecuador, Gabon, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, the United Arab Emirates and Venezuela. We are the only globally mandated development institution that provides financing from member countries to non-member coun- tries exclusively. We work in cooperation with developing country partners and the international development community to stim- ulate economic growth and social progress in low- and middle-income countries around the world. Driven by the organization’s strategic priorities, all operations support sustainable development in sectors including agriculture, energy, transport & storage, water & sanitation, educa- tion and health, aligning clearly with the United Nations Sustainable Development Goals (SDGs).
NOTES:
– Unless otherwise stated, ‘$’ refers to US$. – Transactions approved in euros have been converted to US$. – Minor discrepancies between figures and totals are due to rounding. – Maps are for illustrative purposes only and are not to be taken as accurate representations of borders. – Commitments are operations and agreements that have been signed by the relevant parties.
9
THE OPEC FUND
The OPEC Fund’s global footprint
THE OPEC FUND’S PARTNER COUNTRIES
LATIN AMERICA & THE CARIBBEAN
AFRICA
Commitments in 2020
Commitments in 2020
Antigua & Barbuda
Belize
Angola
Benin
Botswana
Burkina Faso
Argentina
Colombia
Burundi
Cameroon
Barbados
Costa Rica
Cabo Verde
Côte d'Ivoire
Bolivia
Dominica
Central African Republic
DR Congo
Brazil
Nicaragua
Chile Cuba Dominican Republic El Salvador Grenada Guatemala Guyana Haiti Honduras Jamaica Mexico Panama Paraguay Peru St. Kitts and Nevis St. Lucia St. Vincent and Grenadines Suriname Uruguay
Chad
Egypt
Comoros Ghana Congo Republic Lesotho Djibouti Malawi Equatorial Guinea Mali Eritrea Morocco eSwatini Niger Ethiopia Rwanda Gambia, The Senegal Guinea Sudan Guinea Bissau Tanzania Kenya Liberia Madagascar Mauritania Mauritius Mozambique Namibia São Tomé and Príncipe Seychelles Sierra Leone Somalia South Africa Togo Tunisia
Uganda Zambia Zimbabwe
10
THE OPEC FUND FOR INTERNATIONAL DEVELOPMENT
Annual Report 2020
EUROPE
ASIA
Commitments in 2020
Commitments in 2020
Albania
Belarus
Afghanistan
Bangladesh
Bosnia and Herzegovina Kosovo Macedonia Moldova Ukraine
Armenia
China
Azerbaijan
Georgia
Bahrain
Lebanon
Bhutan
Maldives
Cambodia
Oman
Fiji
Pakistan
India
Tajikistan
Jordan
Turkmenistan
Kazakhstan
Uzbekistan
Kiribati Korea DPR Kyrgyzstan
Lao, PDR Mongolia Myanmar Nepal Palestine Papua New Guinea Philippines Samoa Solomon Islands Sri Lanka Syria Thailand Timor Leste
Partner countries Partner countries benefiting from commitments during 2020
Tonga Turkey Vietnam Yemen
11
THE OPEC FUND
Director-General’s foreword
of partner countries, and deepening its contribution to the Sustainable Development Goals (SDGs).
Welcome to the Annual Report of the OPEC Fund for International Development – the only globally mandated development institution that provides financing from member countries to non-member countries exclusively. All developing countries, with the exception of the OPEC Fund’s own members, are eligible for this assistance. This publication provides a detailed overview of the work the organization undertook during 2020 in support of sustainable development. The year-in-review was un- like any other. The global health emergency caused by COVID-19 threatened to undo decades of development progress. The OPEC Fund responded quickly, allocating up to $1bn to assist partner countries and private sector clients to address the impact of the pandemic. See pages 17–21 for a detailed breakdown of COVID-19-specific assistance. The pandemic does not end with a vaccination. The small- and medium-sized enterprises that are so crucial to developing country economies have experienced shocks that risk turning into long-term job losses and closures. This will disproportionately affect low-skilled workers and other vulnerable groups. Similarly, school closures have affected already disadvantaged communities the most. Children from households facing economic challenges were much less likely to have engaged in learning activi- ties following school closures than children from wealth- ier households. We know from previous experience that crises hurt the poorest communities more – and these communities can be slower to recover. Against this backdrop, and following the approval of its Strategic Framework 2030, the OPEC Fund sharpened its focus on development impact, strengthening its position to deliver ever more responsively to the changing needs
In 2020, in line with its Strategic Framework, the OPEC Fund enhanced the management of its capital resources by creating a special fund known as the Special Capital Resources (SCR). The SCR allows the organization to grow its operations in the least developed countries by providing long-term and low-cost loans to support economic and social development. The existing capital resources of the OPEC Fund, renamed Ordinary Capital Resources (OCR), will enable the organization to continue to deploy financing to developing partner countries with a higher level of economic development and to private sector clients. During 2020, the OPEC Fund committed fresh develop- ment finance of $1,203m from the OCR and $387m from the SCR – a total of $1,590m – for operations in more than 30 countries across Africa, Asia, Latin America and the Caribbean, and Europe. Driven by the organization’s strategic priorities, all operations supported sustainable development in sectors including agriculture, energy, transport & storage, water & sanitation, education and health, aligning clearly with the SDGs. The year 2020 has proven beyond doubt that today’s challenges must be faced together, with each partner bringing different strengths to bear. By working with oth- ers across sectors and borders, the OPEC Fund creates opportunities for progress, all the while remaining agile and innovative. Over the coming pages, we illustrate how this cooperation amplifies impact.
12
Abdulhamid Alkhalifa Director-General
THE OPEC FUND
Strategic Framework 2030
The Ministerial Council approved the general principles of the Strategic Framework in July 2019 at its 40 th annual session and authorized the Governing Board, along with Management, to complete all necessary preparations to implement the strategy. The five pillars of the OPEC Fund’s Strategic Framework ensure the organization’s focus remains on maximizing its development impact, strengthening its position to deliver ever more responsively to the changing needs of partner countries, and improving its contribution to the Sustain- able Development Goals (SDGs). Creating a special fund known as the Special Capital Resources (SCR) allows the organization to grow its operations in the least developed countries by providing long-term and low-cost loans to support economic and social development. The existing capital resources of the OPEC Fund, renamed Ordinary Capital Resources (OCR), will enable the organization to continue to deploy financing to developing partner coun- tries with a higher level of economic development and to private sector clients.
In line with the Strategic Framework 2030, all grants provided by the OPEC Fund support initiatives and activities with measurable development impact. For country-specific grants, we prioritize activities that facil- itate the preparation and implementation of new devel- opment operations. This ensures worthwhile projects with strategic partners are granted the early-stage assistance many require to get off the ground. An Implementation Plan guides Management through the implementation process. Chaired by the Assistant Director-General, Public Sector Operations, an Imple- mentation Committee composed of members of Senior Management monitors the progress of workstreams and ensures timely and effective implementation of the Strategic Framework.
14
THE OPEC FUND FOR INTERNATIONAL DEVELOPMENT
Annual Report 2020
Enhance OPEC Fund’s Competitiveness & Impact
Financial Sustainability
Upgrade Project Preparation & Implementation Eciency
Improve Organizational Eciency
Enhance Skill Mix & Human Resource Capacity
15
THE OPEC FUND FOR INTERNATIONAL DEVELOPMENT
Annual Report 2020
The OPEC Fund and COVID-19
In a clear demonstration of support for Sustainable Development Goal 17, which calls for partnerships for the global goals, the OPEC Fund also committed to joint multilateral efforts to help developing countries mitigate, contain and recover from COVID-19. These were targeted to both public and private sectors and will help mobilize billions of dollars of funding to support governments and private enterprise in delivering critical healthcare supplies, ensure MSMEs can access capital, and strengthen global supply chains to sustain millions of workers in developing countries. The OPEC Fund will continue to drive the pooling of public and private financial resources in response to COVID-19. The organization will also remain engaged in knowledge sharing, including providing technical assis- tance, to help build back better in the years ahead.
During 2020, the OPEC Fund responded quickly to COVID-19. Our fast-tracked financing is helping to miti- gate the effects of the pandemic by ensuring assistance is readily available to partner countries most in need. The OPEC Fund approved more than 20 COVID-19-related operations during the year, for over $500m. The finance will assist 15 countries in Africa, Asia and Latin America (see the table on the next page for more details) in ad- dressing the following needs:
• immediate and critical healthcare supplies;
• the resilience and rapid scale-up of healthcare systems (such as increasing the number of hospital beds and trained healthcare professionals); and • the longer-term economic and social impacts of the pandemic, by strengthening essential infrastructure and social safety nets, and supporting local financial institutions and MSMEs.
17
THE OPEC FUND
Approvals for COVID-19-related operations in 2020
Country
Project title
Amount (US$m)
Co-financiers
Total project cost (US$m)
Bangladesh COVID-19 Active Response and Expenditure Support Program
70.0
ADB, AIIB, IMF, World Bank
13,074.0
Belarus
Public Healthcare Emergency Response Program, Phase I
20.0
45.0
Belize
Support to COVID-19 Food Assistance Program
10.0
12.0
Benin
Emergency Support to the Health System in response to the COVID-19 Pandemic
15.0
15.0
Dominica
COVID-19 Emergency Response Public Health Services Program
10.0
30.0
Egypt
Food Commodities Imports Financing Project
30.0
ITFC
El Salvador
El Salvador COVID-19 Response Project
15.0
IBRD
45.0
El Salvador
Economic Revitalisation Line of Credit for the National Devel- opment Bank - BANDESAL
35.0
IDB, CABEI, EIB, IBRD, World Bank
600.0
El Salvador
Financial services provider
25.0
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THE OPEC FUND FOR INTERNATIONAL DEVELOPMENT
Annual Report 2020
Objectives
To help provide social safety net programs for the vulnerable, day laborers and informal workers, as well as healthcare staff.
To support the Public Healthcare Emergency Response Program, focused on strengthening hospitals, clinics and healthcare centers, nationwide.
To help the government extend its COVID-19 Food Assistance Program in both urban and rural areas, and provide hygiene and cleaning supplies to vulnerable communities.
To strengthen disease surveillance and treatment systems, implement mass screening programs and purchase diagnostic tests, laboratory equipment and drugs for hospitals and COVID-19 treatment centers.
To support containment and treatment measures and the expansion of nationwide quarantine services, including the purchase of medical supplies and equipment, and providing salaries for medical personnel.
To support strategic food commodity imports.
To support government investment in hospital equipment, medical supplies, training for health personnel, and communication and health education efforts.
To provide support programs for employees of MSMEs, loans to SMEs and a financing program for entrepreneurs and micro- and small-sized traders, benefiting around 6,000 MSMEs.
For on-lending to SMEs in El Salvador.
19
THE OPEC FUND
Country
Project title
Amount (US$m)
Co-financiers
Total project cost (US$m)
Guatemala
Crecer Sano-Nutrition and Health
50.0
IBRD
160.0
Guatemala
Guatemala COVID-19 Emergency Response
10.0
IBRD
40.0
Guatemala
Financial services provider
30.0
Guyana
Social Safety Net Program 20.0
50.0
Maldives
Public Sector Investment Pro- gram (PSIP) Emergency Loan
20.0
20.0
Maldives
Financial services provider
10.0
Nicaragua
Financial services provider
10.0
Pakistan
COVID-19 Active Response and Expenditure Support Program
50.0
ADB, AIIB, IMF, the World Bank, bilateral donors
7,230.0
Paraguay
Financial services provider
30.0
Rwanda
Rwanda COVID-19 Economic Recovery Fund Emergency Loan
15.0
124.4
Regional (Africa)
Africa Finance Corporation
50.0
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THE OPEC FUND FOR INTERNATIONAL DEVELOPMENT
Annual Report 2020
Objectives
To build health posts, water and sanitation systems, strengthen the immunization supply chain and logistics, and provide medical supplies and equipment, benefitting circa 2.4 million people.
To support Guatemala's efforts to prevent, detect and respond to the threat posed by COVID-19 and strengthen national systems for public health preparedness.
For on-lending to enterprises – particularly those most affected by the pandemic.
To provide food and educational supplies to 20,000 low-income families; social assistance to around 55,000 households; and subsidized loans and loan guarantees to around 300 MSMEs.
To support the government’s Economic Recovery Plan that includes economic relief measures aimed at mitigating the socio-economic impact of the pandemic, especially in the tourism sector.
To provide financing to private sector companies and SMEs in the Maldives’ tourism and related services sector severely affected by COVID-19.
To support working capital and trade-related lending to Nicaraguan SMEs affected by COVID-19.
To provide cash assistance to 12 million families and daily wage workers in the industrial sector and purchase 8.2 million tons of wheat, as well as offer subsidies for agricultural businesses and SMEs and financing for industry and exporters.
To support SMEs in Paraguay via a financial institution as those SMEs address business interruptions and other challenges related to COVID-19.
To enable the restructuring of existing bank loans to tourism-related businesses through the National Bank of Rwanda, and provide lines of credit to large corporates, MSMEs, and savings and credit cooperatives.
For on-lending to infrastructure projects in African countries.
– In addition, the OPEC Fund channeled $1.5m in grants through the World Health Organization in 2020.
21
THE OPEC FUND
Partnerships The OPEC Fund works with the bilateral and multilateral agencies of its member countries, the World Bank Group, regional and national development banks and the special- ized agencies of the United Nations, as well as a host of other organizations.
Since the OPEC Fund was established in 1976, total commitments of more than $22bn have contributed to development projects with an estimated total project cost of over $187bn (see table below).
Total commitments and total project cost* since 1976 ($m)
Sovereign
Since 1976
Total project cost
Agriculture
2,089
12,626
Energy
2,623
38,617
Transport & Storage
4,355
32,215
Water & Sanitation
1,417
14,057
Education
1,022
2,891
Health
763
2,762
Trade Finance
1,872
13,671
Other
2,449
25,972
Sub-total
16,590
142,811
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THE OPEC FUND FOR INTERNATIONAL DEVELOPMENT
Annual Report 2020
Non-sovereign
Since 1976
Total project cost
Financial Institutions
1,255
13,777
Energy
707
10,774
Transport & Storage
189
5,242
Trade Finance
1,994
7,361
Other
768
7,105
Sub-total
4,913
44,260
Total
21,503
187,070
* estimated figures
– Calculation does not include Grant operations.
23
THE OPEC FUND
In 2020, the OPEC Fund committed $1.59bn to develop- ment operations, many of which were co-financed with partners. The total project cost of these operations was more than $19bn.
Private Sector and Trade Finance co-financiers in 2020 included:
Our Public Sector co-financiers during 2020 (in addition to partner country governments and beneficiaries) were as follows:
– Africa Growing Together Fund/People’s Bank of China – African Development Bank (AfDB) – Agricultural Bank of Niger (BAGRI) – Arab Bank for Economic Development in Africa (BADEA) – Asian Development Bank (ADB) – Asian Infrastructure Investment Bank (AIIB) – Global Environment Facility (GEF) – Green Climate Fund (GCF) – International Development Association, World Bank Group (IDA) – International Federation of Red Cross and Red Crescent Societies (IFRC) – International Fund for Agricultural Development (IFAD) – International Monetary Fund (IMF) – Islamic Development Bank (IsDB) – Kuwait Fund for Arab Economic Development (KFAED) – Saudi Fund for Development (SFD) – World Bank Group – World Health Organization (WHO)
– African Development Bank (AfDB) – Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG) – Emerging Africa Infrastructure Fund (EAIF) – Dutch Entrepreneurial Development Bank (FMO) – Infrastructure Development Company Limited (IDCOL) – International Finance Corporation (IFC) – International Islamic Trade Finance Corporation (ITFC) – Islamic Corporation for the Development of the Private Sector (ICD) – MUFG Bank
NOTE: – Includes 2019 project loans signed in 2020
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THE OPEC FUND
2020 highlights
$ 1 bn We allocated to help COVID-19-affected (see pages 17-21)
communities across the world and joined multilateral efforts to help developing countries mitigate, contain and recover from the pandemic.
$ 1.59 bn In 2020, the OPEC Fund committed for development operations around the world.
We approved emergency grants channeled through the IFRC to support countries in Central America following Hurricane Eta, to help Lebanon in the aftermath of the Beirut Port explosion, and to support relief efforts in Sudan following severe flooding.
$ 25 bn $ 22 bn Since the OPEC Fund was established in 1976, cumulative approvals exceed and cumulative commitments exceed
We launched a new strategic part- nership with Oman to help drive development in line with the country’s ambitions to become a major regional logis- tics hub.
26
THE OPEC FUND FOR INTERNATIONAL DEVELOPMENT
Annual Report 2020
$ 10 m We signed our first private sector agreement in Turkmenistan: Turkmenistan (SBFEAT) to help the bank provide better support to SMEs. term loan in favor of the State Bank for Foreign Economic Affairs of
We signed a new agreement with the Arab Bank for Economic Development in Africa (BADEA) to strengthen cooperation in common partner countries.
We presented EarthSpark Inter- national, a non-profit organization committed to expanding access to electricity in Haiti, with the 2020 OPEC Fund Annual Award for Development. (see pages 36–39)
We signed an enhanced Memo- randum of Understanding with the European Bank for Recon- struction and Development (EBRD) to support increased development cooperation.
We signed a framework agreement with the West African Development Bank (BOAD) to strengthen development cooperation in the member countries of the Western African Economic and Monetary Union.
27
CHAPTER 2
OPERATIONAL HIGHLIGHTS
OPERATIONAL HIGHLIGHTS
Operational highlights
By commitments (agreements signed during 2020) 1
$m
2020
2019
2018
2017
2016 Since inception
By source OCR
1,203
1,117
1,603
1,190
714
21,115
SCR 2
387
387
By category Sovereign
1,145
780
1,297
870
448
16,589
Non-sovereign
445
337
306
320
266
4,913
Sovereign operations
By sector
Agriculture
70
80
125
99
23
2,089
Energy
93
62
133
61
23
2,623
Transport & Storage
276
175
317
157
163
4,355
Water & Sanitation
114
70
223
27
36
1,417
Education
53
20
102
44
12
1,022
Health
45
56
54
14
20
763
Trade Finance
235
275
313
418
124
1,872
Other 3
259
42
30
50
48
2,449
By region ASP
272
235
267
180
71
3,831
ESA
91
140
172
105
57
3,166
LAC
82
82
380
164
47
2,498
MEC
368
174
192
196
106
3,524
WCA
332
149
287
225
168
3,569
30
THE OPEC FUND FOR INTERNATIONAL DEVELOPMENT
Annual Report 2020
Non-sovereign operations
2020
2019
2018
2017
2016 Since inception
By sector
Financial Institutions
130
45
45
70
62
1,255
Energy
60
81
81
40
105
707
Transport & Storage
30
189
Trade Finance
255
161
165
99
74
1,994
Other
50
15
81
25
768
By region ASP
22
83
55
35
63
909
ESA
70
100
60
40
737
LAC
65
60
30
30
55
761
MEC
150
127
60
177
75
1,474
WCA
138
67
61
18
34
1,032
NOTES:
– 1 Excludes Grant operations – 2 SCR was created as of January 1, 2020. – 3 Sector breakdown: Multisector/cross-cutting; Business and Other Services. – Sovereign operations: A loan to, or a guarantee by, a sovereign. – Non-sovereign operations: Financing that is not a sovereign- backed financing.
31
OPERATIONAL HIGHLIGHTS
SPECIAL CAPITAL RESOURCES***
ORDINARY CAPITAL RESOURCES
2020
2020
2019
2018
2017
2016
Portfolio
Outstanding Loans
1,237
4,282
5,527
5,259
4,949
4,511
by Operation Sovereign
1,237
3,021
4,432
4,244
3,863
3,471
Non-Sovereign N/A
1,261
1,095
1,015
1,085
1,040
Disbursements
292
1,025
1,481
1,406
1,113
831
by Operation Sovereign
292
656
1,135
1,134
836
602
Non-Sovereign N/A
361
333
251
262
212
Grants
N/A
8
13
21
15
17
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THE OPEC FUND FOR INTERNATIONAL DEVELOPMENT
Annual Report 2020
SPECIAL CAPITAL RESOURCES***
ORDINARY CAPITAL RESOURCES
FINANCIAL HIGHLIGHTS 2020
2020
2019
2018
2017
2016
Selected Statement of financial position data Assets 1,666
5,919
7,224
7,380
7,318
7,168
of which Public Sector Loans Private Sector & Trade Finance Loans
1,203
2,842
3,704
3,542
3,347
3,209
34
1,281
1,338
1,270
1,218
1,069
Liquidity Assets
428
1,439
1,836
1,814
1,914
1,994
Equity Investments
N/A
108
118
127
152
120
Liabilities**
13
269
1,785
177
189
165
Equity
1,653
5,649
5,438
7,203
7,129
7,003
of which Member Country Contributions*
1,557
2,380
2,324
4,262
4,262
4,262
Reserves
95
3,269
3,114
2,941
2,867
2,740
Income statement Data Income from Develop- ment Financing Income from Liquid Investments Currency Valuation and Other Income
101
165
148
134
67
114
7
55
144
17
156
111
0
(4)
10
10
9
4
Expenses
(13)
(72)
(70)
(68)
(62)
(60)
Net Income
95
144
233
93
169
170
* Creation of SCR and change in Accounting Policy for reporting Member Countries' Contributions (MCC) receivables in 2019. ** Liabilities increased in connection with the creation of SCR. The amount of $1,557m was reclassified from Equity to Liabilities in 2019. *** SCR Financial Statements are prepared according to a Special Purpose Reporting Framework.
A full version of the financial statements is available at https://opecfund.org/publications
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OPERATIONAL HIGHLIGHTS
The OPEC Fund and the Sustainable Development Goals
The OPEC Fund’s Strategic Framework 2030 guides the organization’s operations to sectors and projects that support the SDGs. Building on our strengths and near 45-year experience in Africa, Asia and Latin America and the Caribbean, we finance sustainable development in sectors including agriculture, energy, transport & storage, water & sanitation, education and health. The following case studies are examples from our 2020 operations and demonstrate how we support our partner countries on the journey toward the SDGs. A full list of all signed operations during 2020 is provided on pages 48-50.
The Sustainable Development Goals (SDGs) are a univer- sal call to action to end poverty, protect the planet and improve the lives and prospects of everyone, everywhere. The 17 Goals were adopted by all UN Member States in 2015, as part of the 2030 Agenda for Sustainable Devel- opment, which set out a 15-year plan to achieve the Goals. Today, progress is being made in many places, but, over- all, action to meet the Goals is not yet advancing at the speed or scale required. 2020 needs to usher in a decade of ambitious action to deliver the Goals by 2030.
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THE OPEC FUND FOR INTERNATIONAL DEVELOPMENT
Annual Report 2020
35
CASE STUDY: The OPEC Fund Annual Award for Development
THE OPEC FUND FOR INTERNATIONAL DEVELOPMENT
Annual Report 2020
LOCAL CONNECTIONS IN HAITI BRING AN ENERGY OF THEIR OWN EarthSpark International, a non-profit organization com- mitted to expanding access to electricity in Haiti, was awarded the 2020 OPEC Fund Annual Award for Devel- opment. The award, first introduced in 2006, includes a $100,000 prize. It recognized EarthSpark for its inno- vative solutions to energy access and climate-related projects and for providing outstanding support to rural communities in Haiti. Today, more than one billion people around the world live without electricity or with insufficient and unreliable access to energy. Nearly three billion people use polluting fuels like wood or biomass to heat or cook, impacting air quality and causing widespread health problems. In Haiti, where more than half of the population lives on less than $1/day, some 75 percent of people lack access to electricity. EarthSpark tackles these challenges head on. To date, it has laid the foundations for a national micro-grid plan by launching two vanguard solar-powered community micro-grids, directly serving about 4,000 people. EarthSpark is now working to develop additional micro-grids that will directly connect some 84,000 people and provide an additional 200,000 people with access to newly-powered businesses and services. The switch from kerosene lamps and diesel generators is expected to drive down CO 2 and black carbon emissions, improve household and small business economics, and improve local air quality.
Allison Archambault, President of EarthSpark Internation- al, said: "The OPEC Fund Annual Award for Development reaches EarthSpark at a pivotal moment between founda- tion building and scale-up. EarthSpark will use this award to support core operations as the team launches the next micro-grids and pulls together the funding and regulatory commitments to enable the next 22 grids.” EarthSpark’s ‘feminist electrification’ approach ensures that rural women benefit from, and take leadership roles in, infrastructure planning, training and employment. EarthSpark works directly with local businesses and co- operatives to develop new productive uses of electricity for agriculture to enhance incomes and food security. OPEC Fund Director-General Dr. Abdulhamid Alkhalifa said: “The OPEC Fund recognizes that access to modern, reliable and affordable energy is closely linked to the empowerment of women, in addition to socio-economic development more generally. It is clear that EarthSpark has the potential to expand these valuable projects and increase support to vulnerable communities, as well as to inspire others. “The OPEC Fund hopes that bestowing this year’s Annual Award for Development on EarthSpark will help to accel- erate the next phase of the non-profit’s business plan and scale up its efforts to enable reliable energy access for more communities in Haiti.”
For more information, see an editorial feature in the OPEC Fund Quarterly magazine: https://bit.ly/3dcUln3
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THE OPEC FUND FOR INTERNATIONAL DEVELOPMENT
Annual Report 2020
The OPEC Fund Annual Award for Development was introduced in 2006 to highlight the achievements of organizations and individuals in reducing poverty and supporting sustainable development. Past winners include: Vida Duti, in recognition of her remarkable work in striving for sustainable water, sanitation and hygiene (WASH) services for the population of Ghana; Bangladesh-based BRAC for its support of Rohingya refugees in Bangladesh; the Foundation for Integral Development in Guatemala; Syrian refugee Doaa Al Zamel; the Children’s Cancer Hospital in Egypt; Kenya’s Kakenya Center for Excellence; Malala Yousafzai of Pakistan; Dr. Mazen Al-Hajri, renowned ENT surgeon and philanthropist; Professor Muhammad Yunus; and Bartolina Sisa National Confederation of Peasant Indigenous Native Women of Bolivia.
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Other operational case studies
THE OPEC FUND FOR INTERNATIONAL DEVELOPMENT
Annual Report 2020
REGION: Africa BORROWER: Africa Finance Corporation (AFC) OPEC FUND FINANCING: $50m (Private Sector)
OBJECTIVES: To help finance and build infrastructure needed for Africa’s post-COVID-19 recovery. The proceeds of the 10-year loan to AFC will help address the continent’s infrastructure financing gap. The loan will also support increased finan- cial flows to Africa and contribute to COVID-19 recovery
efforts in African economies by freeing up government funds to meet urgent financing needs related to the pan- demic.
COUNTRY: Burkina Faso PROJECT: Dori and Fada N’Gourma Universities Expansion OPEC FUND FINANCING: $23m (Public Sector) CO-FINANCIERS*: BADEA TOTAL PROJECT COST: $44.75m
OBJECTIVES: To meet the country’s growing need for a qualified workforce and provide a better academic environment. Planned works include: – Building a new campus at the University of Dori, including dormitories and other ancillary facilities, as well as a Science and Technology Training and Academic Research Unit – Expansion of the University of Fada N’Gourma campus through the construction of two dormitory blocks with a 1,000-student capacity – Provision of all furnishings, teaching and learning equipment for both universities
* in addition to recipient country government and beneficiaries
41
OPERATIONAL HIGHLIGHTS
COUNTRY: China PROJECT: Hubei Vocational Education OPEC FUND FINANCING: $30m (Public Sector) CO-FINANCIER: Government of China TOTAL PROJECT COST: $37.6m
OBJECTIVES: To provide quality education through the expansion and renovation of the Xianning Vocational and Technical College. Works will include: – 70,000m 2 buildings constructed, including a multipurpose training center, dormitories and other academic facilities – 35,000m 2 facilities renovated / built, including four new classroom buildings and two dormitories – 15,500 students per year accommodated – 29,000 professionals and skilled laborers able to seek additional training
COUNTRY: Colombia BORROWER: Banco Davivienda OPEC FUND FINANCING: $50m (Private Sector) CO-FINANCIERS: IFC-arranged syndication
OBJECTIVES: To enable the bank to strengthen its capital base (New Tier 2) and sustain the growth of its lending portfolio to women-owned MSMEs, social housing, and green building projects. This is the OPEC Fund’s first private sector transaction in Colombia. The project will support low- income households’ access to mortgages and improve female entrepreneurs’ access to funding. It will also drive a counter-cyclical action, as many people are facing additional challenges from COVID-19.
42
THE OPEC FUND FOR INTERNATIONAL DEVELOPMENT
Annual Report 2020
COUNTRY: Dominica PROJECT: COVID-19 Emergency Response Public Health Services Program OPEC FUND FINANCING: $10m (Public Sector)
OBJECTIVES: To support COVID-19 containment and treatment meas- ures and the expansion of nationwide quarantine services. This will require the purchase of medical supplies and equipment, and salaries for medical personnel.
CO-FINANCIERS*: World Bank TOTAL PROJECT COST: $30m
COUNTRY: Ghana BORROWER: Ghana Cocoa Board (Cocobod) OPEC FUND FINANCING: $45m (Trade Finance)
OBJECTIVES: The OPEC Fund participated in a $1.3bn syndicated pre-export finance facility for Cocobod, for the purchase of cocoa beans from the 2020/21 harvest. Cocoa is one of the largest foreign exchange earners for Ghana and the cocoa industry is a major source of employment, with around 800,000 families active in cocoa farming. Coco- bod’s functions range from providing quality control to the industry, to making seeds and pesticides available and marketing cocoa beans and cocoa products.
* in addition to recipient country government and beneficiaries
43
OPERATIONAL HIGHLIGHTS
COUNTRY: Ghana PROJECT: Eastern Corridor Development Program (Phase I) OPEC FUND FINANCING: $20m (Public Sector) CO-FINANCIERS*: AfDB TOTAL PROJECT COST: $106.5m OBJECTIVES: To improve domestic / regional trade and stimulate economic development for circa 230,000 people. Works will include:
– 40km road constructed – 24km stretch repaired – Weighing station and rest stop built
COUNTRY: Lesotho PROJECT: Lesotho Lowlands Water Development Project-Botha Bothe Region OPEC FUND FINANCING: $30m (Public Sector) CO-FINANCIERS*: BADEA, KFAED, SFD TOTAL PROJECT COST: $108.7m OBJECTIVES: To improve the health and living conditions of about 118,000 people. The project is expected to reduce the incidence of waterborne illnesses, particularly among infants and children under five years of age. Civil works will include: – 6,700 house connections installed – 400 water points established – 42 storage reservoirs tanks installed – 45,200m 3 /day capacity water treatment plant built – 357km pipe networks installed
44
THE OPEC FUND FOR INTERNATIONAL DEVELOPMENT
Annual Report 2020
COUNTRY: Malawi PROJECT: Transforming Agriculture through Diversification and Entrepreneurship - TRADE OPEC FUND FINANCING: $20m (Public Sector) CO-FINANCIERS*: IFAD TOTAL PROJECT COST: $125.4m
OBJECTIVES: To support various actors along the value chain and build the capacity of smallholder farmers and rural organizations.
– Around 1.3 million beneficiaries – 1,000km feeder roads rehabilitated
– 68 warehouses built – 10 livestock markets – 15 honey storage centers and 16 milk collection centers provided – 30 community boreholes installed
COUNTRY: Rwanda PROJECT: Rwanda COVID-19 Economic Recovery Fund Emergency Loan OPEC FUND FINANCING: $15m (Public Sector) CO-FINANCIER: Government of Rwanda TOTAL PROJECT COST: $124.4m
OBJECTIVES: To support businesses in the sectors most affected by COVID-19 and help safeguard development gains through the establishment of two facilities. The first facility will enable the restructuring of existing bank loans to the tourism sector through the National Bank of Rwanda. The second will provide lines of credit to large corporates, SMEs, MSMEs, and savings and credit cooperatives. It will also support a Business Development Fund for vulnerable people engaged in informal work.
* in addition to recipient country government and beneficiaries
45
OPERATIONAL HIGHLIGHTS
OBJECTIVES: To construct agricultural production and marketing infrastructure and to improve natural resources manage- ment and environmental monitoring, benefiting 300,000 people. Work will include: – 11,930ha of valleys and lowlands developed – 300ha of small horticulture / vegetable gardens, as well as 500ha of larger vegetable farms created for women and youth – 8 pastoral water points built – 100km of rural feeder roads rehabilitated – 70 produce warehouses built – 3,800ha of mangroves reforested – 6,000 improved stoves distributed – 32 village nurseries established – natural resources management and environmental monitoring implemented
COUNTRY: Senegal PROJECT: Water Valorisation for Value Chains Development Project (PROVALE-CV) OPEC FUND FINANCING: $20m (Public Sector) CO-FINANCIERS*: AfDB, Africa Growing Together
Fund/People’s Bank of China, IFAD TOTAL PROJECT COST: $136m
COUNTRY: Uzbekistan PROJECT: Improvement of Water Supply in Yangikurgan District OPEC FUND FINANCING: $54m (Public Sector) CO-FINANCIER: Government of Uzbekistan TOTAL PROJECT COST: $71.94m OBJECTIVES: To improve living conditions and public health for circa 185,000 people. Works will include: – 58km of main trunk network installed – 162km of distribution network constructed / repaired – 7 distribution centers built / repaired – 2 water intake structures with 14 wells built – 62,220 house connections with meters installed
* in addition to recipient country government and beneficiaries
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OPERATIONAL HIGHLIGHTS
OPEC Fund commitments during 2020
Region Project / borrower
Country
Sector
OPEC Fund $ Total project cost $
SDG
ASP
COVID-19 Active Response and Expenditure Support Program
Bangladesh Other
70,000,000 13,074,000,000 3, 8
ASP
Feni Lanka Power Limited (FLPL) Bangladesh Energy
22,000,000 91,500,000
7
MEC Public Healthcare Emergency Response Program, Phase I LAC Upgrading of Caracol Road Project, Phase II LAC Support to COVID-19 Food Assistance Program in Belize
Belarus
Health
20,000,000 20,000,000
3
Belize
Transport and Storage
10,000,000
36,840,000
9
Belize
Other
10,000,000
12,000,000
2, 3
WCA Emergency Support to the
Benin
Health
15,000,000
15,000,000
3
Health System in response to the COVID-19 Pandemic
WCA Dori and Fada N’Gourma
Burkina Faso Burkina Faso Burkina Faso
Education
23,000,000 44,750,000
4
Universities Expansion Project.
WCA Cotton Export Financing
Trade Finance 33,880,000
110,797,000
8
WCA Commodity Import Financing
Trade Finance 50,000,000 150,000,000
8
WCA Cotton & Soya Beans Financing Cameroon Trade Finance 27,854,141
49,000,000
8
WCA Cotton & Soya Beans Financing Cameroon Trade Finance 8,477,347
49,000,000
8
ASP
Hubei Vocational Education Project
China
Education
30,000,000 37,600,000
4
LAC Banco Davivienda Colombia
Colombia
Financial Institutions
50,000,000 500,000,000
5, 8
LAC Banco Improsa
Costa Rica Trade Finance 15,000,000
15,000,000
8
WCA Atinkou S.A.
Côte d' Ivoire
Energy
38,720,000
100,000,000
7
WCA North Kivu Agriculture Sector Support Project
Dem. Rep. Congo Dem. Rep. Congo
Agriculture
15,000,000
58,260,000
2, 3
WCA Ozone Water Supply Project
Water and Sanitation
30,000,000 97,310,000
3, 6
LAC COVID-19 Emergency Response Public Health Services Program
Dominica
Health
10,000,000
30,000,000
3
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THE OPEC FUND FOR INTERNATIONAL DEVELOPMENT
Annual Report 2020
Region Project / borrower
Country
Sector
OPEC Fund $ Total project cost $
SDG
MEC Micro-, Small and Medium Enter- prise Development (MSMED) III Project MEC Food Commodities Imports Financing Project
Egypt
Other
95,000,000 95,000,000
8
Egypt
Trade Finance 30,000,000 300,000,000
2, 8
MEC Natixis*
Europe
Trade Finance 50,000,000 100,000,000
8
MEC TBC Bank
Georgia
Trade Finance 50,000,000 50,000,000
8
WCA Eastern Corridor Development Program (Phase I) WCA Ghana Cocoa Board (Cocobod) 2020/21 Facility ESA Lesotho Lowlands Water De- velopment Project-Botha Bothe Region ESA Transforming Agriculture through Diversification and Entrepreneurship - TRADE
Ghana
Transport and Storage
20,000,000 106,500,000
8, 9
Ghana
Trade Finance 50,000,000 1,300,000,000 8
Lesotho
Water and Sanitation
30,000,000 108,700,000
6, 13
Malawi
Agriculture
20,000,000 125,350,000
1, 2, 8
ASP
Outer Islands Harbors, Water Supply and Sewerage Facilities Project Public Sector Investment Pro- gram (PSIP) Emergency Loan
Maldives
Other
50,000,000 65,250,000
3, 6
ASP
Maldives
Other
20,000,000 20,000,000
3, 8
WCA Rehabilitation of the Sevaré – Gao Road (Sevaré – Boré Section)
Mali
Transport and Storage
20,000,000 65,380,000
8, 9
MEC Raw Material Import Financing
Morocco
Trade Finance 20,000,000 40,000,000
8
LAC El Tortuguero-La Esperanza Rural Electricity Transmission Project LAC Ochomogo-Las Salinas Rural Road Project WCA Strengthening Resilience of Rural Communities to Food and Nutri- tion Insecurity Program (PRECIS)
Nicaragua
Energy
20,500,000 23,000,000
7
Nicaragua
Transport and Storage
30,000,000 33,900,000
9
Niger
Agriculture
15,000,000
195,860,000
2, 3
* Trade Guarantee Program
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OPERATIONAL HIGHLIGHTS
Region Project / borrower
Country
Sector
OPEC Fund $ Total project cost $
SDG
MEC Alsharqiya Expressway Tunnels Project
Oman
Transport and Storage
130,000,000 157,000,000
9
ASP
Jamshoro Power Project
Pakistan
Energy
72,000,000 1,165,160,000
8, 9
ASP
Commodity Imports to Pakistan Pakistan
Trade Finance 30,000,000 500,000,000
8
ESA East African Development Bank (EADB) WCA Africa Finance Corporation - Senior Debt
Reg. Africa Financial Insti- tutions Reg. Africa Financial Institutions
20,000,000 20,000,000
8
50,000,000 50,000,000
3, 9
ESA TDB Bank*
Reg. Africa Trade Finance 50,000,000 100,000,000
8
ESA Rwanda COVID-19 Economic Recovery Fund Emergency Loan WCA Water Valorisation for Value Chains Development Project (PROVALE – CV)
Rwanda
Other
15,000,000
15,000,000
8
Senegal
Agriculture
20,000,000 136,000,000
2, 8
WCA Commodity Import Financing
Senegal
Trade Finance 54,497,232
110,000,000
8
MEC Central Asia Regional Economic Cooperation Corridors 2, 3, and 5 (Obigarm–Nurobod) Road Project ESA Kazilambwa-Chagu Road Upgrading Project MEC The State Bank for Foreign Af- fairs of Turkmenistan (SBFEAT) MEC Improvement of Water Supply in Yangikurgan District and the City of Namangan Project
Tajikistan Transport and Storage
40,000,000 178,100,000
8, 9
Tanzania
Transport and Storage
26,000,000 27,500,000
8, 9
Turkmeni- stan
Financial Institutions
10,000,000
25,000,000
8
Uzbekistan Water and Sanitation
53,960,000
71,940,000
3, 6
MEC Uzbek Industrial and Construction JSC Bank (Uzpromstroybank)
Uzbekistan Trade Finance 20,000,000 20,000,000
8
* Trade Guarantee Program
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