The OPEC Fund for International Development (OFID) may provide funding to Nigeria and other African nations with the help of donors.
It may be noted that the OPEC Fund had stated in July that it planned to sell its first financial bonds worth $1 billion on the international markets this year.
The Director General of the OFID, Abdulhamid Alkhalifa, was recently quoted as saying that the Fund could issue low-interest bonds following its 2021, high credit rating and is only waiting for global markets to stabilize. He was speaking on the sidelines of the Islamic Development Bank Group (IsDB) meeting.
He explained further that due to the high risk involved in their selected projects, commercial banks are usually not the best to rely on in terms of finance.
It was his view that development institutions, such as the OPEC Fund, do not compete with commercial banks in financing projects. They were established to take high risks. It is, therefore, necessary to ensure the sustainability of the return on these projects by being at least able to repay the provided financing to be sustainable for a longer period.
The Fund has been providing development aid since its founding in 125 countries at a cost of $190 billion in total, with a capital of roughly $7.5 billion.
According to records, the Fund finances nearly 50% of African nations, including Sudan and the Arab nations of North Africa. Other Arab nations, the Caribbean, Eastern Europe, and Asia regions have also received funding.
Along with the agriculture and water sectors, the Fund also focuses on the transport, health, education, and energy sectors, which are among the crucial ones in the target regions and nations.
The head of OFID claims that during the coronavirus outbreak, more than $1 billion was spent in the health and allied industries.
The head of OFID claims that during the coronavirus pandemic, more than $1 billion was invested in the health and allied industries. The Fund currently has no plans to grow either its capital or member subscriptions.
The anticipated value of the first bonds issued by the Fund might be $300 million, $500 million, or $1 billion, in line with the Fund’s goals to diversify its funding sources.
About $1.8 billion in total loans were approved by the Fund in 2021, and $2 billion is anticipated to be approved in 2022.
The Organisation of Petroleum Exporting Countries (OPEC) established the OPEC Fund, a multilateral development finance institution, in 1976. The OPEC Fund only provides funding from member countries to non-member countries.
By giving these nations financial help for their socioeconomic development, the OPEC Fund seeks to strengthen financial cooperation between OPEC Member Countries and other developing nations.
There has been a request for a change in its focus as the food crisis has become more severe in many poor countries. As a result, the Fund is in communication with other partners to put together a package of aid for poor nations to help lessen the effects of the present food crisis.
