THE HISTORY OF THE OPEC FUND
each lending program a list of priority countries was established including least developed countries and low-income countries. “No international development institution has put as much emphasis on the least developed countries in its operations as the OPEC Fund,” Director- General Shihata stated in 1981. At the same time, the institution retained the flexibility to provide support to higher- income countries on a case-by-case basis, when particular circumstances justified such an approach. The OPEC Fund’s priorities were expressed not only in the choice of partner countries but also in the selection of priority sectors such as agriculture (and food security), energy, financial institutions and infrastructure. Combining economic with social development, the institution also identified education and health as focus areas, often opening operations with grant financing. For many years, the predominant instrument was public sector loans, which continue to represent the largest part of operations with a current share of around 70 percent of the portfolio. The OPEC Fund also differed from other development agencies and international financial institutions through its strict impartiality. OPEC Fund development support to partner countries is not conditioned on economic or political parameters but determined based on clear development needs and aligned with the OPEC Fund’s strategy and mission. Saeid Niazi, who headed the institution’s Financial Operations Department from 2003-2017, remembers: “I felt a strong desire to serve in a place where finance and development intersected. The OPEC Fund represented exactly that combination. Its mission of strengthening South-South cooperation and supporting the needs of developing countries aligned with my values and aspirations. My decision to join the OPEC Fund marked a natural progression in a career built around financial discipline, institutional governance and a commitment to development impact.” Equipped with this philosophy of impartial partner country support, a
The African Fertilizer Development Center in Zimbabwe The Center started operations in 1987 to conduct and support research and development, demonstrate the role of fertilizers for improved agricultural output and foster regional and international cooperation. The OPEC Fund supported the establishment with a US$50,000 grant in 1983 for initial outlays. In March 2025, the newly appointed Commissioner for Agriculture at the African Union Commission, Moses Vilakati, announced that the reactivation of the Center will be one of his “key priorities”.
The OPEC Fund supported the African Fertilizer Development Center with a grant of US$50,000 in 1983.
diverse financial toolbox and the backing of its member countries, the OPEC Fund successfully established itself. By the time Director-General Shihata was appointed Senior Vice President and General Counsel at the World Bank in Washington, DC in July 1983, the OPEC Fund had approved 328 loans exceeding US$1.8 billion to 82 partner countries through balance of payments support and project and program loans covering almost all economic sectors. The loan program was complemented early on by a fast-growing grants program: It took no longer than five years from the first grant approval in August 1977 to the 100th in 1982. The numbers achieved in the early years were impressive, especially since they were delivered with a very small staff “as shall be necessary to carry out [the OPEC Fund’s] functions,” according to the founding agreement. Staffing numbers only grew slowly: “We were six
professionals, when I joined,” remembers Abdelkader Benamara. But the success of the OPEC Fund was not judged only by numerical data. A key question was the extent to which the institution was fulfilling its objectives of assisting the development efforts of partner countries and doing so in a manner that strengthened South-South cooperation and dialogue. Taking stock as he concluded his tenure, Director- General Shihata was able to say: “The OPEC Fund has made its presence felt as a recognized source of international development finance.”
29
Powered by FlippingBook