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OPEC Fund loan to support SMEs and agriculture in Paraguay
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October 7, 2021: The OPEC Fund for International Development has signed a US$30 million term loan agreement with Banco Regional of Paraguay for on-lending to small-and medium-sized enterprises (SMEs), particularly agribusinesses that have been severely disrupted by economic slowdowns as a result of the COVID-19 pandemic.
Agribusiness is a key economic driver of Paraguay’s economy and food exports are the main source of the country’s foreign currency. The sector is composed primarily of agro-related SMEs, generating over 80 percent of employment. The OPEC Fund loan will help Banco Regional to address the SMEs' needs for liquidity caused by business interruption in connection to the partial COVID-19 lockdown. Banco Regional is one of the leading financial institutions in Paraguay, with a strong focus on lending to agribusiness, representing around half of the bank’s portfolio.
OPEC Fund Director-General Abdulhamid Alkhalifa said: “Building on our strong partnership with Banco Regional, we will provide access to finance for small- and medium-sized businesses, particularly in agribusiness, a vital sector for Paraguay’s economy. This will help to increase Paraguay’s links to global value chains, support exporting SMEs and protect employment in related industries. This loan is well aligned with several of the United Nations’ Sustainable Development Goals (SDGs) - SDG 1: No poverty; SDG 2: Zero hunger; SDG 3; and SDG 8: Decent work and economic growth.”
This is the third facility the OPEC Fund has extended to Banco Paraguay. Proceeds from the first loan were used to on-lend to 36 sub-borrowers in the agriculture sector. The second facility provided 53 sub-loans to Paraguayan enterprises for international trade finance purposes, pre-export finance of cash crops and import of agricultural supplies and machinery.
The OPEC Fund has supported Paraguay’s development-focused goals for over 40 years and financed projects in sectors including the financial, transportation, energy and agriculture through its public, private and trade finance, and grants operations.
About the OPEC Fund
The OPEC Fund for International Development (the OPEC Fund) is the only globally mandated development institution that provides financing from member countries to non-member countries exclusively. The organization works in cooperation with developing country partners and the international development community to stimulate economic growth and social progress in low- and middle-income countries around the world. The OPEC Fund was established by the member countries of OPEC in 1976 with a distinct purpose: to drive development, strengthen communities and empower people. Our work is people-centered, focusing on financing projects that meet essential needs, such as food, energy, infrastructure, employment (particularly relating to MSMEs), clean water and sanitation, healthcare and education. To date, the OPEC Fund has committed more than US$22 billion to development projects in over 125 countries with an estimated total project cost of US$187 billion. Our vision is a world where sustainable development is a reality for all.