The OPEC Fund for International Development OPEC FUND QUARTERLY 1 2026
Shaping the future of global development
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The OPEC Fund Quarterly is published four times a year by the OPEC Fund for International Development. The OPEC Fund works in cooperation with developing country partners and the international development community to stimulate economic growth and social progress in low- and middle-income countries around the world. The organization was established by the member countries of OPEC in 1976 with a distinct purpose: to drive development, strengthen communities and empower people. Views and opinions expressed by guest contributors are solely the authors’ and don’t reflect the opinions or beliefs of the OPEC Fund. The OPEC Fund Quarterly is available free. If you wish to be included on the digital distribution list, please contact us via opecfund.org . Back issues of the magazine can be found on our website. The contents of this publication do not necessarily reflect the official views of the OPEC Fund or its Member Countries. Any maps are for illustration purposes only and are not to be taken as accurate representations of borders. Editorial material may be freely reproduced, providing the OPEC Fund Quarterly is credited.
PUBLISHERS The OPEC Fund for International Development Parkring 8, A-1010 Vienna, Austria
EXECUTIVE EDITOR Nadia Benamara EDITOR Axel Reiserer EDITORIAL TEAM Howard Hudson, Axel Reiserer, Nicholas K. Smith CONTRIBUTORS See back cover PHOTOGRAPHS Abdullah Alipour Jeddi, Nayef Shoshare (unless otherwise credited) PRODUCTION Iris Vittini Encarnacion DESIGN Robin Turton, More Tea Design Ltd PRINTED IN AUSTRIA Print Alliance HAV Produktions Gmbh This publication is printed on paper produced from responsibly managed forests.
Tel: (+43-1) 51564-0 Fax: (+43-1) 51392-38 www.opecfund.org
THE OPEC FUND:
The OPEC Fund for International Development was established in 1976 and to date has committed more than US$30 billion to development projects in over 125 countries worldwide with an estimated total project cost of more than US$200 billion. Founded in the spirit of solidarity, the OPEC Fund is mostly active in Africa, Asia, Latin America and the Caribbean. The institution offers loans, equity, trade finance, guarantees and grants to public and private sector partners, covering standalone projects and comprehensive development programs. The OPEC Fund has a long history of co-financing with partners in the development community based on an efficient business model, allowing it to be agile in response to partner country needs.
12 Member Countries
125 Partner Countries
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OUR IMPACT IN THE WORLD
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CONTENTS
CONTENTS
THE OPEC FUND AT 50 – WHERE PARTNERSHIP POWERS PROGRESS
The OPEC Fund Timeline 8-13 Fifty years of commitment, dedication and achievements Our Remarkable Journey 14-17 Interview Hamad S. Al-Bazai,
A Vision for the Future 62-65 Interview President
Our Legal Foundations 88-90 Honoring the vision of our
founders while building a framework to ensure even greater impact
Abdulhamid Alkhalifa: “The size of global challenges requires us to scale our ambition”
The OPEC Fund People’s Story 91-93 “We think big but also care deeply”: The OPEC Fund’s
Chairman of the OPEC Fund Governing Board: “While the world has changed, people’s fundamental needs remain”
The Big Picture 66-75 International economic development: A 50-year retrospective Special Feature: Women in Development 76-81 Why women’s empowerment is key to a sustainable future 82-85 Gender equality in action: The OPEC Fund’s contribution 86-87 “Our projects can save lives”:
mandate attracts talent from across the world
The History of the OPEC Fund
An inclusive approach to development
Our Next Generation 94-96 “No two days are the same”:
18-29 The Founding Years –
The Shihata Era (1976-1983) 30-39 From the South, for the World – The Abdulai Era (1983-2003) 40-49 Venturing into New Frontiers – The Al-Herbish Era (2003-2018) 50-59 Transforming for the Future – The Alkhalifa Era (since 2018) One World – One OPEC Fund 60-61 Headline numbers: A visual guide
The Young Professional Development Program is a transformative experience
Our Homes 97-101 If these walls could talk: A history of
the OPEC Fund in four buildings
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EDITORIAL
OUR PAST SHAPES WHO WE ARE TODAY AND INSPIRES WHO WE CAN BECOME TOMORROW
Dear Reader,
T he year 2026 marks the 50th anniversary of the establishment of the OPEC Fund for International Development. In five decades, the institution has grown from humble beginnings to becoming a globally recognized development financier. It has expanded its volume, scope and outreach many times over. It has evolved from a “Special Account” to a financial institution with an AA+ rating and the ability to successfully issue bonds on the international capital markets. Yet one thing has not changed – solidarity. The principle and practice of solidarity stood at the birth of the OPEC Fund and remains the central theme for everything the institution does. Solidarity with the Global South. Solidarity with people fighting poverty, suffering from hunger or affected by climate change. Solidarity with nations struggling to establish a foothold in the global economy. Solidarity focused on lives and livelihoods, empowerment and self-determination. Based on these foundations, the OPEC Fund has become a remarkable success story. And to paraphrase the old saying, success has many parents. The strength of the mandate as set out by the founders; the generous financial contributions and proactive engagement of the member countries; the alignment of partner countries and business partners with sustainable development; the wise counsel provided by the institution’s leadership; and the commitment of staff to the
cause of working toward a world where sustainable development is a reality for all. Remarkable progress has been made along this road and when we look back at the OPEC Fund’s history, we often find the institution playing a pioneering role at key moments of global development, including the fight against hunger (see page 23), energy poverty (page 43), initiatives to help highly indebted poor countries (page 39), the refugee crisis (page 44) and, most recently, food insecurity (page 55) and climate action (page 54). The active role in global initiatives is reflected in a significant expansion of financial commitments, which grew from US$1.8 billion in 2019 to US$2.3 billion in 2024, while dramatically deepening the OPEC Fund’s impact when measured against the Sustainable Development Goals (see page 54). While financing is the instrument, impact is what development institutions and multilateral development banks are measured against. The OPEC Fund Development Effectiveness Framework shows remarkable results across the board. One of the preconditions for success is staying true to a comprehensive and inclusive concept. It is empirically clear that limiting half of humanity’s potential curtails economic and social development. In a Special Feature, our magazine explores the OPEC Fund’s long-standing commitment to women in development (see page 76 onwards). What is also clear is that development never stops. It is a rarely linear, ever-
evolving process. Periods of gain do not insulate nations from regression and no country may claim immunity from global turbulence, as our overview demonstrates (see page 68). In the “polycrisis world” in which we live today, development is beset on all sides. Yet for the OPEC Fund this is a clear mandate to redouble our efforts and reinforce our engagements. President Abdulhamid Alkhalifa says: “Our priorities are straightforward. First, we need to mobilize much more capital. Second, we are deepening our work at country level. And third, we remain laser-focused on results. That mindset is our engine for the future” (see page 64). This was also the guiding idea for this Special Edition of our magazine. A deep dive into the history of the OPEC Fund allows us to pay tribute to the founders and previous generations who built the institution from the ground up. We are grateful to those who came before us and in whose footsteps we follow. Their legacy guides our present and inspires our future with the shared ambition to constantly improve and deliver. Because, as President Alkhalifa puts it, since inception 50 years ago the OPEC Fund’s core belief has always been: “What matters is the difference we make to people’s lives.” Thank you to all those who have made this happen, who are making this happen and who will make this happen.
Axel Reiserer
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THE OPEC FUND TIMELINE
THE OPEC FUND AT 50 “THE GREATEST THREAT TO OUR PLANET IS THE BELIEF THAT SOMEONE ELSE WILL SAVE IT.” As the OPEC Fund marks its 50-year anniversary, here’s a look at some of the key moments in our half-century of service to the countries most in need By Nicholas K. Smith and Iris Vittini Encarnacion
1981 • Headquarters Agreement with Republic of Austria signed • Palais Erzherzog Wilhelm, also known as Deutschmeister-Palais, purchased as new Headquarters • Third replenishment agreed
1976 • The OPEC Special Fund established on January 28 with an initial endowment of US$800 million (following an agreement of the OPEC member countries in Algiers in 1975) • Ibrahim Shihata appointed first Director-General • The OPEC Special Fund becomes operational in August
1978 • 100th loan signed – US$3 million balance of payments agreement with Burkina Faso 1979 • The OPEC Fund moves
to Palais Strudlhof, its first standalone Headquarters, in Vienna, Austria
• First transaction signed – US$7.45 million balance of payments loan to Sudan
• First renewable energy project signed – US$3.5 million for the El Cajon Hydroelectric Project in Honduras
1977 • First agriculture sector project – US$1.65 million loan to Jordan for the Northeast Ghor Canal • First grant signed – US$ 1.5 million to the United Nations
1980 • Renamed the OPEC Fund for International Development • Becomes permanent legal entity as an international development agency • Second replenishment agreed
1982 • The OPEC Fund moves into permanent Headquarters on Ringstrasse • First education project signed – US$3.3 million
Development Programme (UNDP) for the Central American Energy Program • First replenishment of the OPEC Fund’s capital resources agreed • International Fund for Agricultural Development (IFAD) established following contributions from several international donors, including the OPEC Fund
for Papua New Guinea • Disbursements exceed US$1 billion
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THE OPEC FUND TIMELINE
1988 • First multisector project signed – US$4.8 million for
1983 • Y. Seyyid Abdulai succeeds Ibrahim Shihata as Director-General • 100th grant signed – US$500,000 for the establishment of the African Fertilizer Development Center in Zimbabwe
the urban development Priority Works Project in Ghana
1986 • 10th anniversary seminar –
member country ministers are joined by President of Austria, Rudolf Kirchschläger and former Chancellor of Austria, Bruno Kreisky
• First higher education project signed – US$3 million for the Botswana Polytechnic Project
1985 • First health project signed – US$3.2 million for Msambweni and Webuya Hospitals Project in Kenya • First livestock project signed – US$1.4 million
1987 • First vocational
1990 • 500th signed loan goes to Madagascar for a US$5 million education project
education projects signed – Loans to Dominica, Grenada, St. Kitts, St. Lucia and St. Vincent and the Grenadines for the Regional Vocational and Technical Training
for the Dembou Dairy Project in Niger • First primary education project signed – US$1.5 million for Benin
Project totaling US$2.5 million
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THE OPEC FUND TIMELINE
1999 • Private Sector Operations start with approval of US$2.5 million loan to Banque Populaire de Mauritanie
1996 • US$2.5 million loan committed to the Atoll Schools Upgrading and Expansion Project in the Maldives
1991 • US$10 million loan signed for Sudan’s Third Commodity Import Program to procure essential agricultural inputs • US$3.8 million loan committed for the Rural Roads Rehabilitation Project in Jamaica
2000 • Staff headcount reaches 100 2001 • US$8 million in loans committed to two major road rehabilitation projects in Tajikistan • HIV/AIDS account launched with an initial US$15 million allocation
1997 • Cooperation begins with Carter Center on Guinea Worm Eradication Program • The OPEC Fund joins the Heavily Indebted Poor Countries (HIPC) Debt Relief Initiative
1998 • The OPEC Fund website launched • Former US President Jimmy Carter visits Headquarters
2002 • Establishment of Special Account for Palestine 2003 • 1000th loan approved – US$6.6 million for a vocational training project in Namibia, the first operation in the country • Suleiman J. Al-Herbish
1994 • First loan to emerging Europe signed – US$4.96 million for the Durres General Hospital Project in Albania 1995 • US$6 million loan committed to the Rural Electrification Project in Burkina Faso
(right) succeeds Y. Seyyid Abdulai as Director- General • US$20 million allocated to rapid food delivery in response to famine in Sub-Saharan Africa
• US$4.3 million committed to the Bagre Dam Project in Burkina Faso together with World Bank, African Development Bank and other co-financers
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THE OPEC FUND TIMELINE
2004 • Establishment of Blend Facility, a new public sector financing window, which leverages concessional financing to widen outreach to partner countries • Humanitarian aid to countries affected by the Southeast Asia earthquake and tsunami
2007 • Third OPEC Summit issues Riyadh
Declaration: “We recognise that energy is essential for
2010 • First teacher training project signed – US$11 million loan for Malawi • First geothermal energy project signed – US$7 million loan for Djibouti
poverty eradication, sustainable development and the achievement of the Millennium Development Goals.”
2008 • The OPEC Fund launches the Energy for the Poor initiative
2011 • First grants disbursed
• US$9.9 million loan provided to the Sivas-Erzincan Development Project in Türkiye, boosting the agriculture sector and strengthening food security for more than 50,000 people
under new special account for energy programs
2006 • Rebranded as OFID, new logo introduced • United Nations General Assembly Observer status granted
2009 • The OPEC Fund makes first loan with the Eastern and Southern African Trade and Development Bank (TDB), later becoming an institutional shareholder • US$600,000 grant to the King Hussein Cancer Foundation in Jordan for a new interventional radiology suite
2012 • US$1 billion pledge for Energy for the Poor initiative • US$100 million in emergency aid exceeded • First wind energy project signed – US$15 million private sector loan to Foundation Wind Energy II Limited in Pakistan • Cooperation with Austrian Development Agency begins with a US$500,000 grant for a solar thermal project in four southern African countries 2013 • US$600,000 grant funds a series of water, sanitation and hygiene interventions for cholera prevention in Cameroon and Chad
• Trade Finance operations begin with a commodity import support project in Seychelles • Inaugural Annual Award for
Development given to the Zimbabwe branch of the NGO HUMANA People-to-People
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THE OPEC FUND TIMELINE
2014 • First solar energy project for a centralized grid signed – US$10 million loan for Falcon Ma’an solar power plant in Jordan • Grants totaling US$1 million to the Shell Foundation for clean cookstoves in Sub-Saharan Africa, Latin America and the Caribbean
2018 • Abdulhamid Alkhalifa succeeds Suleiman J. Al-Herbish as Director-General
2017 • US$17 million loan provided for Baynouna solar power plant in Jordan, the country’s largest green energy project at that time
• Signed a US$20 million loan to Maldives in support of the Outer
• Cooperation resumes with St. Vincent and the Grenadines with a US$18.52 million project rehabilitating more than 40 km of road
Islands Water Supply and Sewerage Facilities Project for 12,000 inhabitants
2015 • Young Professional Development Program (YPDP) begins • US$500,000 grant benefits a rural electrification solar mini-grid project in Guinea-Bissau 2016
2019 • Strategic Framework 2030 launched • A US$36 million public sector loan funds the transmission section of Temane, a major power plant project in Mozambique, while a later US$50 million private sector loan finances the facility itself
• In conjunction with the 40th anniversary commemorations, the Equal Dreams campaign highlights the plight of refugees: Four grants signed totaling more than US$2 million to international refugee organizations • OPEC Fund monument erected outside the United Nations Offices in Vienna
2020 • US$1 billion allocated to help COVID-19-affected communities across the world and provide businesses with access to finance
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THE OPEC FUND TIMELINE
2021 • Name reverts to the OPEC Fund for International Development • US$20 million loan benefits a water, sanitation and hygiene (WASH) project in Sierra Leone’s capital Freetown
2024 • First sustainability-linked loans signed • First loan syndication with member country financial institution arranged, from Commercial Bank of Dubai, UAE to Banco Continental, Paraguay • A €50 million loan supports a trade finance facility for the commodities broker Sucden for procurement and export of traceable cocoa beans
• The OPEC Fund announces a US$1 billion pledge in support of the Riyadh Global Drought Resilience Partnership • The OPEC Fund expands its
2023 • The OPEC Fund debuts on London Stock Exchange with inaugural US$1 billion SDG bond • US$48 million loan signed for Khizi-Absheron wind power plant in Azerbaijan • A €20 million loan in Albania and a US$20 million loan in Botswana support micro, small and medium- sized enterprises, as our first private sector loans to financial institutions in those countries
Headquarters to include the newly renovated Palais Colloredo-Mannsfeld
• A US$18 million loan helps finance Egypt’s largest private sector solar power project Kom Ombo • Inaugural credit rating of AA+, with Stable Outlook from Fitch Ratings • Palais Colloredo-Mannsfeld purchased to expand Headquarters in Vienna
2022 • Climate Action Plan adopted, calling for 40 percent of new annual financing to climate- relevant projects by 2030 • Food Security Action Plan adopted • First OPEC Fund Development Forum in Vienna • Staff headcount reaches 200
2025 • Green-Blue Connect Initiative launched at COP30, endowed with US$3 billion • The OPEC Fund pledges up to US$2 billion for Mission 300 initiative, connecting 300 million people to electricity in Sub-Saharan Africa by 2030 • Small Island Developing States (SIDS) initiative recognized at International Conference on Financing for Development
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HAMAD S. AL-BAZAI
INTERVIEW HAMAD S. AL-BAZAI
“WHILE THE WORLD HAS CHANGED, PEOPLE’S FUNDAMENTAL NEEDS REMAIN” Hamad S. Al-Bazai, Chairman of the OPEC Fund Governing Board, on “our remarkable journey” as a catalyst for development and how understanding the past can help us shape the future By Howard Hudson and Axel Reiserer
OPEC Fund Quarterly : Can you tell us about your early life and how your professional journey brought you to the OPEC Fund? Hamad S. Al-Bazai: I began my career as a university professor, teaching Economics at King Saud University in Riyadh, Saudi Arabia. I served as Assistant Professor, then Associate Professor and later as Acting Dean of the College of Business and Economics. My professional transition came when I joined the Ministry of Finance as Deputy Minister for Economic Affairs. That role opened the door to international financial
relations – working with institutions like the International Monetary Fund, World Bank, Islamic Development Bank, as well as representing Saudi Arabia in the G20. Through these responsibilities, I became deeply involved in development finance and the work of multilateral institutions. In 2005, I was appointed Governor for Saudi Arabia at the OPEC Fund, before being elected Chairman of the Governing Board in 2017. This journey reflects my commitment to advancing development cooperation and ensuring that institutions like ours deliver real impact.
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INTERVI EW
Hamad S. Al-Bazai
Hamad S. Al-Bazai has been Chairman of the OPEC Fund’s Governing Board since 2017. Previously, he served as Saudi Arabia’s Vice Minister of Finance (2009-2021) and was Associate Professor of Economics at King Saud University, Riyadh.
“Solidarity is much more than a slogan: It is a guiding principle... We will keep this spirit alive and relevant for the next 50 years.” Hamad S. Al-Bazai, Chairman of the Governing Board, OPEC Fund
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HAMAD S. AL-BAZAI
“We’ve worked hard to ensure that the OPEC Fund is not just a financial contributor but also a catalyst for development, using its resources strategically to achieve the greatest possible benefit.”
OFQ : The OPEC Fund member countries set up our institution as an “act of South-South solidarity” – is this approach still valid? HAB: Absolutely. The principle of South- South cooperation remains as relevant today as it was in 1976. Our membership is entirely from the Global South and our partners are developing countries – many of them among the least developed. This identity is much more than a slogan: It is a guiding principle. While the world has changed, people’s fundamental needs remain: access to clean water, energy, education, healthcare and infrastructure. What has to evolve is how we deliver on these needs. Reinforcing our South-South mandate means updating our operational framework, transferring knowledge and providing technical assistance alongside financing. We need to remain demand- driven, respecting partner countries’ priorities while offering expertise gained from similar projects elsewhere. That is how we’ll keep the spirit of solidarity alive and relevant for the next 50 years.
OFQ : When you became Chairman of the Governing Board in 2017, what were your main tasks and the most pressing items on the OPEC Fund’s agenda? HAB: The priorities were clear: maximize the impact of our resources, enhance efficiency and strengthen the OPEC Fund’s visibility. As the largest shareholder, Saudi Arabia places great emphasis on ensuring that contributions are used effectively. The challenge is not only to deploy resources wisely but also to leverage them through co-financing and partnerships. The OPEC Fund is unique because it does not finance projects in member countries; all assistance goes to non- member developing nations. That makes it even more important to spread our impact across regions and sectors. We’ve worked hard to ensure that the OPEC Fund is not just a financial contributor but also a catalyst for development, using its resources strategically to achieve the greatest possible benefit.
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INTERVI EW
OFQ : What are the benefits of being an OPEC Fund member country? HAB: Membership is rooted in a sense of responsibility and solidarity. For Saudi Arabia and other members, contributing to the OPEC Fund is a moral obligation and a strategic choice. It reflects the belief that helping others strengthens the global community. While direct financial benefits to member countries are not part of our mandate, there are indirect advantages. For example, through trade finance and private sector operations member country companies can participate in projects in partner nations. This creates opportunities while preserving the OPEC Fund’s core principle of supporting non-member countries. Beyond simple economics, membership also enhances our international standing and influence, demonstrating leadership in global development efforts. OFQ : How would you advise the OPEC Fund to navigate the twin challenges of energy as the engine of development and climate with the obligations under the Paris Agreement? HAB: Energy poverty remains a critical issue. Millions of people in least developed countries still lack access to electricity. Our approach must always balance environmental concerns with human needs. Affordable energy – whether conventional or renewable – is essential for development. The OPEC Fund has supported initiatives like clean cooking to reduce reliance on wood, which harms both health and the environment. At the same time, we’re investing in renewable energy and promoting climate-friendly solutions. The key is pragmatism: striking a balance between climate goals and the urgent need for energy access. Technology and partnerships will help us achieve this equilibrium, ensuring that development and sustainability go hand in hand. OFQ : What would you say are the OPEC Fund’s landmark achievements over the last 50 years? HAB: Our greatest achievement is the sheer scale of impact. The OPEC Fund has financed thousands of projects
healthcare, education, infrastructure and energy access. Recent development effectiveness reports show impressive numbers of people benefiting from our work. Beyond financing, we’ve provided technical assistance and shared knowledge, helping countries implement projects efficiently. These contributions have transformed communities – bringing clean water, electricity, schools and clinics to places where they were once out of reach. For me, the most rewarding aspect is knowing that our efforts have made a tangible difference in people’s lives all over the world. OFQ : What are your views of the Strategic Framework 2030 and its implementation so far? HAB: The Strategic Framework 2030 was a turning point. It provided a roadmap for adapting to a changing world while staying true to our mission. We introduced new approaches such as policy-based lending and broadened
financial position. Although borrowing came only recently in our history, it has been successful and will become even more impactful as we improve our credit rating. The strategy emphasizes flexibility, allowing us to respond to emerging challenges while maintaining long-term goals. Five years remain and we are determined to deliver on its promise of greater impact and effectiveness. OFQ : How do you rate the success of the borrowing program? HAB: It is a significant achievement. By accessing capital markets, we’ve expanded our resource base far beyond member country contributions. This enables us to finance more projects together with other institutions. Our ambition is to secure a stronger credit rating, which will lower borrowing costs and attract more investors. Achieving AAA status would open doors to new opportunities and allow us to channel additional resources to partner countries. Ultimately, borrowing is not just about funding; it is about positioning the OPEC
our sectoral focus to include technology and innovation.
We also diversified our funding sources through a borrowing program, which has strengthened our
Fund as a credible and competitive player in global development finance.
The OPEC Fund has supported initiatives like clean cooking, which contributes to multiple SDGs.
across more than 125 countries, improving lives through better
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THE HISTORY OF THE OPEC FUND
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THE HISTORY OF THE OPEC FUND
BUILDING TOMORROW, TODAY THE HISTORY OF THE OPEC FUND For 50 years, the institution has delivered what is needed, where it is needed and when it is needed. Now, it is well-positioned to take on an even greater role in global development financing partnerships By Axel Reiserer
T he 1970s was a period of unrest and upheaval, but also of awakening and hope. The world still lived in the shadow of the Cold War, dominated by two seemingly unassailable superpowers – the United States of America and the Soviet Union. Across Africa, the process of decolonialization continued apace with the end of white minority rule in several countries, including Mozambique, Angola and what is now Zimbabwe. The decade ended with the 1979 Islamic Revolution in Iran and the Soviet invasion of Afghanistan.
Meanwhile, another revolution was gathering momentum worldwide. In economics, the collapse of the post- 1945 Bretton Woods settlement caused severe disruptions, triggering high inflation and record unemployment in advanced economies. The shift away from a stable, regulated economic environment allowed the first blossoming of globalization, but at the price of greater market volatility. Globalization was also fueled by technological advances: In 1975, Microsoft was founded, and two years later, in 1977,
the Apple II, the first mass-produced home computer, went on sale. Global developments affected the countries allied in the Organization of the Petroleum Exporting Countries (OPEC), too. The dollar cost of crude oil had risen by less than 2 percent per year from 1947-1967 but increased dramatically in the following years. From 1970 to end-1974, the price of Saudi Light Crude rose from US$1.21 to about US$11. While this meant a huge inflow of revenue for oil-producing countries, it posed an enormous challenge for other countries.
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THE HISTORY OF THE OPEC FUND
The Founding Years – The Shihata
T he OPEC countries were not blind to the struggles of fellow developing countries. In the 1960s and 1970s, intra-Arab solidarity and Arab solidarity with other emerging regions like Africa were blossoming. The establishment of the Kuwait Fund for Arab Economic Development in 1961, the Arab Fund for Economic and Social Development in 1968, the Dubai Fund in 1971 and the Saudi Development Fund in 1974 were testament to this approach. Ibrahim Shihata, who became the OPEC Fund’s first Director-General in 1976, wrote: “Birth and growth of the OPEC aid phenomenon did not follow the oil price.” Instead, one strong impetus for setting up the OPEC Fund was the goal to make national aid delivery more effective by taking a more structured, better aligned and closely coordinated approach. Secondly, the early days of the OPEC Fund were clearly fueled by the world view held at the time by many developing nations: “We believe that the developing countries which have managed to achieve some measure of prosperity have done so in spite of the international economic system and not thanks to it,” Director-General Shihata said in a speech at the United Nations in 1981.
Nevertheless, "launching an institution such as the OPEC Fund was not an evident task," as the later Assistant Director-General Said Aissi once put it, and accelerated by the boost in external revenues. By the time of the first OPEC Summit in Algiers in March 1975, all but three countries had their national aid agencies focused on low-income countries in the Global South. This term is usually understood to comprise countries in Africa, most of Asia and Oceania as well as Latin America and the Caribbean. Many are organized in the Group of 77 (G77), established in 1964 and today the largest intergovernmental organization of developing countries in the UN with currently 134 countries (the historical name has been retained). The participants of the OPEC Summit in Algiers agreed on the idea of establishing a collective aid facility. The plan was referred to the OPEC Ministers of Finance who passed a recommendation in November 1975 for the “establishment of a new facility for the provision of additional financial support to less developed countries under the aegis of OPEC.” However, it would not be a special organ of OPEC, nor would it have any legal or administrative link with that organization.
Ibrahim F. I. Shihata
Ibrahim F. I. Shihata, 1937-2001, was an Egyptian international lawyer who served as the first Director-General of the OPEC Special Fund, later renamed OPEC Fund for International Development, from 1976-1983. Holding a BA in Law from Cairo University Law School and a PhD in International Law from Harvard University, he worked as Legal Counsel at the Kuwait Fund for Arab Economic Development before being appointed to head the newly established OPEC Special Fund. Shihata is credited for designing the legal, governance and operational framework of the institution. A dedicated advocate in the fight against poverty, he championed global development cooperation and successfully positioned the OPEC Fund as a multilateral institution committed to supporting developing countries in the Global South. After his time at the OPEC Fund, he continued his career at the World Bank as General Counsel and Secretary-General of the International Center for Settlement of Investment Disputes (ICSID). He is also remembered as the founding father of the Multilateral Investment Guarantee Agency (MIGA), set up in 1988 to provide political risk insurance and credit enhancement guarantees.
The first OPEC Summit in Algiers, March 1975
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THE HISTORY OF THE OPEC FUND
Era (1976-1983)
Experts reviewed a wide variety of proposals and options before eventually settling on a proposal calling for the establishment of an “OPEC Special Fund” as a special account administered by a joint committee. This “special account” would consist of a series of accounts held and administered by national agencies. The idea was to pool national resources, avoid duplication and strengthen identification with the common cause – to support fellow developing countries. The spirit of South-South solidarity was also expressed in a groundbreaking provision that became the OPEC Fund’s defining feature in the world of development institutions: The resources would be used only to benefit developing countries other than the contributing members. Article 3.01 of the Agreement Establishing the OPEC Fund says: “Eligible beneficiaries of the financing provided by the [OPEC] Fund shall be: a) the Governments of developing countries other than OPEC Member Countries; and b) international development agencies the beneficiaries of which are developing countries.” Agreement was also reached on the kind of financial support the OPEC Fund would provide: loans for projects, programs and balance of payments support. A unique feature of the OPEC Fund’s public sector loans is that in addition to being concessional, they are not conditional: “In carrying out our mandate, we strive to take sustainable, pro-poor approaches, while respecting our partner countries’ development priorities,” then Director-General Suleiman J. Al-Herbish said in September 2013. Thirdly, the OPEC Fund follows the principle of strict political neutrality. Director-General Shihata emphasized: “If you are a specialized agency, which we are, and our mandate is economic development, then we should leave the political issues to other organizations
G77 statement on development financing
The G77 is pursuing the following: • Securing a commitment to the UN 0.7% official development assistance (ODA) target, as well as a political commitment to reversing recent cuts in ODA. • A commitment to triple multilateral development banks’ (MDB) lending as well as to capital increases. • Improving MDB lending terms, including enhanced concessionality, longer tenor loans and scaling up lending in local currency. • Reaffirming the principle of additionality of climate finance. New York, May 1, 2025
whose mandate is political reform and political rights." Following intense preparations, the Finance Ministers of the OPEC member countries met in Paris in January 1976 “amid tight security precautions,” as the New York Times reported. Terrorists had stormed the previous OPEC ministerial meeting in Vienna on December 21, 1975, and three people had been killed. Undeterred, the Paris meeting went ahead “to work out details of a US$1 billion aid fund for poor countries,” the paper wrote. “Final approval was expected tomorrow.” And so it happened: On January 28, 1976 the Agreement Establishing the OPEC Special Fund was signed in Paris
by the 13 member states of OPEC at that time. The account was directly and collectively owned by the parties to the agreement. The fund was to be administered by a governing committee, later to become the Governing Board, representing all members and with voting power distributed according to a two-tier formula. Each member would have one vote. These votes would then be related to member countries’ contributions. The reference to “ministers concerned” in the founding documents was later interpreted in a way that allowed for the introduction of a second supervisory pillar of governance, the OPEC Fund Ministerial Council.
“The OPEC Fund’s founding mandate – that the resources contributed by OPEC
member countries should be directed exclusively to support the development goals of non-member developing nations – remains at the core of our institution today.”
Abdulhamid Alkhalifa, President, OPEC Fund
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THE HISTORY OF THE OPEC FUND
The accord went into force on May 10, 1976 and the OPEC Fund commenced operations in August 1976 with an initial endowment of US$800 million (US$4.5 billion in today’s money). The institution signed its first operation on December 23, 1976, providing a US$7.5 million balance of payments support loan to Sudan. Similar financing was signed with Samoa, Sri Lanka, Guinea, Pakistan and the Central African Republic later that day, making these six nations the first OPEC Fund partner countries. From the outset, the founders of the OPEC Fund took great care to create a lean, agile and flexible organization. Antonio R. Parra, Assistant Legal
Counsel from 1979-1984, remembers: “One of the big standouts of the OPEC Fund was how much was achieved with very limited resources. There was no waste and we avoided duplicating efforts.” Led by Director-General Shihata, a small staff took up residence in Vienna. They were first housed by OPEC, which had moved its Headquarters to Vienna in 1965, and then at the OPEC Fund’s first standalone site at Palais Strudlhof between 1979 and 1982, next to the legendary stairs of the same name in the city’s elegant ninth district. Abdelkader Benamara, who joined the OPEC Fund in 1979 as a young Algerian economist from
Signing of first loan agreement with Sudan in December 1976 with Director-General Shihata
Palais Strudlhof and the Strudlhofstiege
What the Spanish Steps are to Rome and the Potemkin Stairs are to Odesa is the famous Strudlhofstiege to Vienna, immortalized by Heimito von Doderer’s novel of the same name, one of the main works of Austrian literature of the 20th century. Built from luminescent limestone, the stairs are seen as a masterpiece of Jugendstil (Art Nouveau). The adjacent neoclassical Palais Strudlhof dates back to the late 1800s, featuring a balcony with colonnade overlooking a garden. Over the years, the site has seen its fair share of history: In 1914, a secret meeting of the Austro-Hungarian Ministerial Council adopted the final version of an ultimatum to Serbia, essentially triggering the First World War. In 1970, during the Strategic Arms Limitation Talks (SALT) between the Soviet Union and the United States, the American delegation used the palais as a headquarters. The US Embassy in Vienna is less than a five-minute walk away.
Antonio R. Parra, Assistant Legal Counsel, 1979-1984, OPEC Fund
the International Monetary Fund on a temporary basis before going on to hold senior leadership positions, including Director of Research and Information, remembers: “I took a leave of absence and wanted to stay for two years. But the mandate was fascinating, and we were a very small group who were able to get things done. It was the South-South dimension that was my inspiration. Many people were not happy with the international economic order in the late 1970s, which was biased against the poor.
And there were many ideas and conferences on how to change things. But I felt here at the OPEC Fund we could really do stuff and bring about improvements and change.”
Abdelkader Benamara, Director of Research and Information, 1979-2003, OPEC Fund
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THE HISTORY OF THE OPEC FUND
“Together we can build communities and societies that are prosperous, vibrant and sustainable.”
The OPEC Fund and IFAD
The International Fund for Agricultural Development (IFAD) has its origins in the UN World Food Conference of 1974, when food shortages and famine in Asia and Africa called for urgent action. OPEC country delegates suggested the establishment of an international fund to help finance food production in the world’s poorest nations. They offered to provide almost one half of the new fund’s starting capital. When IFAD was launched in December 1977, the OPEC countries, acting through the then already established OPEC Fund, pledged US$435.5 million, while OECD countries gave US$569 million and other developing countries US$20.6 million. The OPEC Fund later contributed an additional US$20 million to IFAD’s first replenishment. The establishment of IFAD as a joint effort by OECD and OPEC countries, representing developed and developing nations, was widely praised as exemplary. Speaking at its 25th anniversary celebrations in February 2003, then UN Secretary- General Kofi Annan said: “The creation of IFAD represented a new type of
Alvaro Lario, President, International Fund for Agricultural Development
partnership. It was an early example of a global alliance across geographic or ideological differences, joining together for the shared goal of eradicating poverty and hunger.” The partnership between the OPEC Fund, which considers agriculture one of its focus areas and made food security a cross-cutting theme in later years, and IFAD, which invests in rural people and communities to increase productivity, income and resilience, proved to be a perfect match. It has since gone from strength to strength and to date the OPEC Fund has provided more than US$1 billion to more than 120 projects. Examples include rural projects in Guinea-Bissau, Rwanda and Tanzania. Most recently, the OPEC Fund and IFAD signed a cooperation agreement in 2024 to strengthen food security and build climate resilience through joint projects. The latest joint project is a livestock and livelihoods development program in Sierra Leone, a country where more than 21 percent of the population is undernourished.
One of the initial goals of the OPEC Fund was to provide funding for the establishment of the International Fund for Agricultural Development (IFAD) at a time when hunger was a widespread phenomenon. Between 1972 and 1975 a three-year famine that became known as the Global Food Crisis took the lives of about 2 million people, mostly in Southeast Asia and Sub-Saharan Africa. In response, the UN set up IFAD in 1977 and the OPEC Fund provided an initial contribution of US$435.5 million. In a speech in June 2024 the head of IFAD, Alvaro Lario, said at the OPEC Fund Development Forum: “Together we can build communities and societies that are prosperous, vibrant and sustainable.”
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THE HISTORY OF THE OPEC FUND
World Bank, USAID and the national government, provided irrigation and rural development for some 25,000 people in the northern part of the Jordan Valley. The canal has been crucial for making large areas of land productive all year and led to a doubling of agricultural production. Roads are the arteries of most economies. In order to move essential goods from one place to another or to ship products to the market where they can be sold, generating profit and laying the foundations for a healthy business cycle, modern transport infrastructure is essential. In the 1970s, infrastructure development was a priority in national and international development plans as a key to economic growth. A World Bank report in 2004 looked back at this period: “Infrastructure… has long been recognized as a key element of the enabling environment for economic growth… Similarly, the goals related to human development (education and health) rely on services that require supportive infrastructure – water and sanitation to prevent disease, electricity to serve schools and health clinics and roads to access them.” One of the OPEC Fund’s first road projects was a US$1 million loan to the Mahalapye Serule Road in Botswana, signed in 1977 together with the World Bank. The 150 km road was upgraded to two lanes with bitumen surfaces. Its scope exceeded physical works and addressed questions of livelihood of communities in danger of being left behind: “The gap between rural and urban incomes has widened in recent years because of the growing demand for skilled individuals, the result of rapid urbanization and mineral development,” the project report stated. As economies grew and countries sought more and more integration, the construction of roads remained a key sector for the OPEC Fund. “Safe and reliable roads are essential in enabling development,” says the institution’s Development Effectiveness Report 2024. The early 1990s saw a strong increase in lending, but in many countries poor infrastructure remained a serious challenge. When the world gathered in Ethiopia’s capital Addis Ababa in 2015 for the Third International Conference
First agriculture project: US$1.65 MN Northeast Ghor Canal, Jordan
First energy project:
Besides IFAD, OPEC Fund member countries also contributed US$110.7 million to the International Monetary Fund’s (IMF) Trust Fund, established to provide assistance on concessional terms to developing countries. Seven OPEC countries (Iraq, Kuwait, Libya, Qatar, Saudi Arabia, United Arab Emirates and Venezuela) transferred their profits from the IMF gold sales to this facility to assist countries affected by the economic challenges of the era. The OPEC Fund also stood at the cradle of the Common Fund for Commodities, first discussed in the mid-1970s and eventually established in 1989. Most importantly though, the OPEC Fund hit the ground running with its financing of work in the countries of the Global South. Antonio Parra: “South- South cooperation is what the OPEC Fund was and is about.” By the end of 1977 it had provided 71 loans to 58 developing nations. First project loans were signed in critical sectors such as agriculture, energy and transportation in the Middle East, Africa and Asia. Supporting agriculture and the goal of “Zero Hunger” were fundamental for the establishment of the OPEC Fund. The institution provided its first financing in the agriculture sector in 1977 with a US$1.65 million loan to the Northeast Ghor Canal, today known as King Abdullah Canal, in Jordan. The project, jointly financed with the
Sidi Cheho Al Massira Hydropower, Morocco US$3 MN
First transportation project:
Kurmitola Dacca International Airport US$3.5 MN
First road project:
San Jose-Siquirres and Rio Sucid-Puerto Viejo Highways, Costa Rica US$3 MN
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THE HISTORY OF THE OPEC FUND
Transportation sector approvals by region
on Financing for Development, which established the framework for funding sustainable development after the Millennium Development Goals (MDGs) concluded, the summit declaration put the annual infrastructure gap in developing countries at “US$1 trillion to US$1.5 trillion” and promised “enhanced financial and technical support.” To date, the OPEC Fund has invested some US$7 billion in the transportation sector, of which 96 percent were in the public sector and 4 percent were in the private sector. Grants were provided on a very limited basis for technical assistance. The high demand for OPEC Fund support required a doubling of the institution’s resources after little more than one year. In August 1977, the member countries agreed on a first replenishment of US$800 million. The financing also reflected growing recognition that the OPEC Fund should become a permanent institution. A breakthrough was made in September
Total approvals: US$6.87 BN
Africa
Asia
Europe
Latin America & Caribbean
Amounts under US$.09 MN may not be reflected in this chart
Roads to success
In the 1990s, economic growth drove demand for better road infrastructure. Here are examples of OPEC Fund projects: 1991 Ghana National Feeder Road Rehabilitation and Maintenance Project Designed to upgrade and expand Ghana’s rural road network and foster social and economic development in rural communities, this project helped rehabilitate 2,500 km of feeder roads, re-gravel 2,850 km of agricultural access roads and construct 5,000 drainage culverts. 1992 Botswana Trans-Kalahari Road Project With the aim of providing an all-weather link between Botswana’s isolated western districts and the more populated eastern parts of the country, the project financed upgrading of the 589-km long Trans-Kgalagadi road. 1993 Bobo-Dioulasso-Orodara Mali Border Road Project in Burkina Faso This project facilitated the transport of agricultural inputs and products by upgrading a 130-km stretch of dirt road that passes through the country’s most fertile areas. Rehabilitated to all-weather, paved surface, the road promotes trade with other areas. 1994 Rehabilitation and Construction of the Nouakchott-Akjoujt Road Project This project improved the link connecting the outlying agricultural province of Inchiri with the capital city Nouakchott by rehabilitating the 254-km desert road to an all-weather surface. Access to Algeria and Morocco has been facilitated, enhancing Mauritania’s ability to export ores and minerals.
“Safe and reliable roads are essential in enabling development.”
OPEC Fund Development Effectiveness Report 2024
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THE HISTORY OF THE OPEC FUND
1979 and the outbreak of the Iran-Iraq war in the following year. After 1980, oil prices began a steady decline over the next 20 years. Responding to the changes in the global environment and the urgent needs of partner countries, the OPEC Fund revised its basic agreement to make it a permanent legal entity, now named the OPEC Fund for International Development. An important step was empowering the OPEC Fund to administer loans and appraise projects, while maintaining the option of working
with other international or national institutions. The next step in institution building was to make Vienna, the capital of Austria, the permanent and sole legal domicile of the institution. On April 21, 1981 the OPEC Fund signed a Headquarters Agreement with the Republic of Austria. In the same year, the OPEC Fund purchased the Palais Erzherzog Wilhelm, also known as the Deutschmeister-Palais. Hanno Scheuch, Director, Institutional & Administrative Unit, Legal Services, says: “The move
1979, when an amendment to the founding agreement allowed loan repayments to be used in future operations. The same year saw the signing of the OPEC Fund’s 100th loan and the creation of the first OPEC Fund logo. As the 1980s began, political tensions and economic volatility reached new heights. The global economy suffered a significant slowdown, widespread high inflation and worsening economic imbalances. Oil production was severely affected by the Iranian Revolution in
“Life’s caravan never turns back”
As the ocean gateway for six landlocked neighbors, Tanzania, an East African nation of 67 million people, plays an outsize role in regional development. Its ports, particularly Dar es Salaam and Tanga, control access to maritime routes for Zambia, Malawi, Burundi, Rwanda, Uganda and the Democratic Republic of the Congo, enabling them to import and export goods that are crucial for their economies. Yet despite its potential as a conduit country, Tanzania’s transport infrastructure scored just 3.34 out of 100 in the Africa Infrastructure Development Index 2022 – far lower than the regional peers Uganda (6.42), Kenya (10.43) and Rwanda (11.55). To address this deficit and help the country improve its connectivity, the OPEC Fund has joined with partners including the African Development Bank (AfDB) on several road and rail projects across Tanzania. In 2025, the OPEC Fund approved financing for the Uvinza-Malagarasi segment of the Tanzania Standard Gauge Railway (SGR). This project aims to enhance regional integration and improve transportation for passengers and freight. The OPEC Fund’s US$75 million loan provides financial support for the implementation of the 156 km section of the railway line in Tanzania. Juan Felipe Murcia, OPEC Fund Development Effectiveness Officer,
says: “This project significantly enhances regional connectivity, stimulates economic growth and provides a modern, efficient and reliable transportation corridor. It is designed to reduce transport costs, alleviate pressure on existing roads and unlock the region’s economic potential. It will benefit communities by improving access to markets, promoting agricultural value chains and supporting local economic activities.” The OPEC Fund has a strong track record in Tanzania’s transport sector with the construction and upgrading of vital traffic arteries – getting goods to ports, farmers to markets and patients
“This project is designed to reduce transport costs, alleviate pressure on existing roads and unlock the region’s economic potential.” Juan Felipe Murcia, Development Effectiveness Officer, OPEC Fund
to hospitals. As the Swahili proverb has it: “Life’s caravan never turns back.”
The OPEC Fund project team on mission
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