THE HISTORY OF THE OPEC FUND
The Millennium Development Goals
Sector Operations, points out: “The OPEC Fund was established in a particular historical context as a means to foster South-South cooperation and solidarity, with a special emphasis on the most deprived regions and countries. As an institution of the South, we leverage our strategic position and fruitful cooperation established over the years with partner countries and development finance institutions to optimize financial flows to Africa while achieving more sustainable and greater development impact.” A mounting problem of many developing countries was addressed with the 1996 launch of the Heavily Indebted Poor Countries (HIPC) Initiative established by the International Monetary Fund and the World Bank. In a major departure from earlier practice, the initiative represented a coordinated and concerted effort to provide exceptional assistance to help bring debt and debt-service burdens down to sustainable levels. The OPEC Fund had been advocating debt relief for especially vulnerable countries since the 1970s and signed HIPC loan agreements in 1997 with Bolivia, Burkina Faso, Guyana and Mali as first steps. By 2024, of the 39 countries eligible or potentially eligible for HIPC Initiative assistance, 37 reached their completion point and were receiving full debt relief from the IMF and other creditors, covering more than US$100 billion in debt. One of the most recent countries to achieve this milestone was Somalia: In June 2024, a bridge loan by Saudi Arabia cleared the country’s arrears to the OPEC Fund, which allowed the institution to restart its work in the East African nation. Looking back at the achievements during his tenure and also looking ahead, Director-General Abdulai reflects today: “I would like to see the OPEC Fund grow in the way it is now. It is a mission which the member countries have persisted in making sure continues. And that is why it is what it is today.
warmly and said: “We look forward, with enthusiasm, to the challenges of a new century, which we see more as opportunities rather than as difficulties.” By the time the OPEC Fund marked its 25th anniversary in 2001, it had supported global development with US$5.6 billion in funding via 837 approved loans to finance projects and programs in agriculture, education, energy, health, industry, transportation, water and sanitation. Lending was complemented by 524 grants for technical assistance programs, emergency aid operations, food security, research and other activities. Whereas in the early days there was a clear emphasis on support for large- scale infrastructure and energy projects, under Director-General Abdulai the OPEC Fund was increasingly involved in projects of a more social nature, often The OPEC Fund as of 2001 US$5.6 billion in funding 837 approved projects 524 grants 100+ partner countries Fight against hunger, poverty, debt burden
designed to tackle poverty at its most basic level, helping to meet people’s everyday needs and providing them with means to strive for a better future. In a speech at a conference in Brussels in November 1995, Director-General Abdulai said: “The OPEC Fund is always concerned to stress the importance of ensuring the sensitive micro- management of social sector aid when targeting the very poorest segments of society in the least developed countries. It is always essential to listen closely to the end-users of aid. For in the long run it is people who make projects succeed, and not finely tuned accounting procedures.” Africa received the lion’s share of OPEC Fund support in the first 25 years: 49 countries with loans approved totaling US$2.1 billion; followed by Asia with 32 countries and loans amounting to US$1.7 billion; and Latin America & the Caribbean with 23 beneficiary countries and US$535 million. In the 1990s, the OPEC Fund for the first time in its history also provided a loan in Europe when it signed a US$5 million financing for the Durres Grand Hospital Project in 1994. More projects in the western Albanian port city would follow in later years. Mahmoud Khene, Director, Africa, Public
I cannot see a time, even in the next 50 years, when the international community will decide that we don’t have to help them anymore. Since we are making a difference, we have every reason to continue.”
Mahmoud Khene, Director, Africa, Public Sector Operations, OPEC Fund
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