The OPEC Fund is considering issuing bonds worth up to $ 1 billion

The OPEC Fund is considering issuing bonds worth up to $ 1 billion

Al-Khalifa to Asharq Al-Awsat: We are preparing an aid package for developing countries to deal with the consequences of the food crisis


Monday – 7 Dhul Ki’de 1443 Hijri – 06 June 2022 Number of the wind of Christ Nr. [
15896]


Dr. Abdul Hamid Al-Khalifa, Director General of the OPEC Fund (Middle East)

Sharm El-Sheikh: Sabri is successful

Dr. Abdul Hamid Al-Khalifa, Director General of the OPEC Fund for International Development, revealed that the fund’s management is considering issuing its first financial bonds this year in global markets, with a maximum of up to $ 1 billion.
In an exclusive statement to Asharq Al-Awsat, on the sidelines of the Islamic Development Bank Group meetings in the Egyptian city of Sharm El-Sheikh, Al-Khalifa said: “Over the past year, we have received a high credit rating. And this enables the fund to issue low-interest bonds … but we expect stability in international markets ”.
He added that the expected value of the first bonds offered by the fund, “could be $ 300 million or $ 500 million, with a maximum of $ 1 billion, in light of the fund’s plans to diversify funding sources,” he added. note that the fund appointed managers for the offer from several countries, but he did not mention them.
The OPEC Fund for International Development is an international financial development institution, established in 1976 with the aim of promoting cooperation between the member countries of the Organization of the Petroleum Exporting Countries (OPEC) and developing countries, and is headquartered in the Austrian capital (Vienna). ). It is a development fund that finances development projects and supports the balance of payments of developing countries and the private sector. However, the OPEC Fund did not and will not specifically benefit its members, in accordance with the founding statute of the Fund.
Al-Khalifa explained: “The fund is developmental and targets non-member countries, as member countries are barred from benefiting from the OPEC Fund, although there are developing countries from it.” He explained that the fund has provided development assistance to 125 countries around the world, with a total financial cost of $ 190 billion, since its inception.
The capital of the OPEC Fund for International Development amounts to about $ 7.5 billion and there is currently no need to increase capital or increase membership. According to the caliph.
Regarding the projects identified by the fund, Al-Khalifa said that the projects selected are usually high risk and commercial banks usually refuse to finance them … But the will of the development fund makes it withstand these high risks. . He said: “Development institutions do not compete with commercial banks in financing projects. Development institutions were created to take high risks.” However, he added, “However, it is necessary to ensure the sustainability of project returns and for the project to at least be able to repay the funding provided later, in order to be sustainable for a long period. “and these projects are usually long-term.”
He referred here to the fund policy approved during the last 3 years, which “depends on the speed of response to the requests of developing countries”. The head of the OPEC Fund said: “About 50 percent of the funding provided by the Fund is in African countries, including Arab countries in North Africa and Sudan … and we have funding provided to other Arab countries … and the Caribbean, Eastern Europe and Asia. “He explained that the fund targets the transport, health, education and energy sectors, which are among the most important sectors in which the fund operates, in addition to agriculture and water …” We work in many African countries and water projects have very high development returns … with high risks as well. ».
In this regard, Khalifa said: “The total loans approved in 2021 amounted to about $ 1.8 billion.” It is expected to grow to about $ 2 billion in 2022.
He noted that more than $ 1 billion has been spent on the health sector and related sectors during the outbreak of the Corona pandemic. However, he mentioned here a new crisis that affects most countries, especially developing ones, and the Fund shows interest in it, saying: “Now we have entered another crisis, which is the food crisis … We have many requests for help in the food sector, in light of the current food crisis “, explaining that” the current crisis is not due to the consequences of the war alone, but for cumulative reasons, for example: desertification. “However, the war is what caused the consequences of the crisis to increase.”
In this regard, Khalifa said: “We are now working with other partners, from Arab and international development institutions, to prepare an aid package for developing countries to help them overcome the effects of the current food crisis. . ” The caliph did not specify the size of the aid, saying: “The study has not yet been completed to determine the financial allocation.”
Al-Khalifa concluded his conversation with Asharq Al-Awsat by focusing on the importance of the OPEC Development Fund Forum, which is scheduled to take place before the end of this month, to discuss ways to transform decisions, and recommendations of the Fund in current implementation, to accelerate the results of development and returns to the countries and projects in which the Fund is working.
The forum is planned to be attended by finance ministers from member states and beneficiary countries, as well as officials from development institutions working with the fund, in addition to some private sector institutions.


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