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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