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UNCDF and OPEC Fund sign agreement to collaborate on sustainable finance solutions: Development organizations to jointly unlock finance to deliver SDGs
Vienna, Austria, March 23, 2022 – The UN Capital Development Fund (UNCDF), the UN’s flagship catalytic finance organization for the world’s 46 least developed countries (LDCs), and the OPEC Fund for International Development (OPEC Fund), a multilateral development finance institution, entered into an agreement to collaborate on solutions that will innovate and scale finance to accelerate the delivery of the Sustainable Development Goals (SDGs), specifically for the countries possessing both the greatest development needs as well as the enormous untapped potential for economic growth and development.
A Memorandum of Understanding (MoU) between the two development organizations signed today by UNCDF Executive Secretary Preeti Sinha and OPEC Fund Director-General Dr. Abdulhamid Alkhalifa reflects the shared vision of UNCDF and the OPEC Fund to help people to rise out of poverty and achieve sustainable lives and will build on existing areas of partnership around sustainable finance.
One of the areas the two organizations are looking to collaborate on is building viable energy markets for clean cooking solutions. UNCDF will be working in particular with the OPEC Fund’s energy transition pilot program in Madagascar, alongside the UN Development Programme (UNDP) and the United Nations Industrial Development Organization (UNIDO).
UNCDF Executive Secretary Sinha said: “UNCDF complements traditional grant-making and technical assistance with a capital mandate that is very unique to the UN system—a unique capital mandate that enables us to use financing capabilities and instruments; including loans, guarantees and blended finance funds. The OPEC Fund provides public, private and trade sector financing, grants as well as innovative financing solutions to support vital development projects in low and middle-income countries across the world. By harnessing the synergies of our two organizations, we have an opportunity to accelerate the achievement of the Sustainable Development Goals or the SDGs, specifically for the world’s least developed countries that possess both the greatest development needs as well as the enormous untapped potential for economic growth and development.”
OPEC Fund Director-General Dr. Alkhalifa said: “We are very pleased to take our cooperation with UNCDF to the next level with the signing of this Memorandum of Understanding today. We have already partnered successfully in the past as we share the ambition to use capital as a catalyst for sustainable growth and development. Going forward our teams will now work on a detailed roadmap for our joint effort for the benefit for those who need us most.”
The partnership between UNCDF and the OPEC Fund intends to bring together the core competencies of the two organizations. As a hybrid organization, UNCDF complements traditional grant-making and technical assistance with a capital mandate unique to the UN system that enables the use of financing capabilities and instruments, including loans, guarantees and blended finance funds across areas of technical expertise. The OPEC Fund provides public, private and trade sector financing, grants as well as innovative financing solutions to support vital development projects in low and middle-income countries across the world.
In a series of meetings that laid the foundation for the MoU, Executive Secretary Sinha and OPEC Fund Director-General Dr. Alkhalifa discussed joint activities for further collaboration. Such projects will come from UNCDF’s project pipeline. They will revolve around the themes of promoting digital economies that are economically inclusive, becoming a technical and financial partner to spur transformational finance at the local level, as well as unlocking capital finance for small and medium-sized enterprises, financial service providers and local infrastructure projects.
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. The OPEC Fund is rated AA+/Outlook Stable by Fitch and AA/Positive Outlook by S&P in 2021. Our vision is a world where sustainable development is a reality for all.
About the UN Capital Development Fund (UNCDF)
The UN Capital Development Fund makes public and private finance work for the poor in the world’s 46 least developed countries (LDCs). UNCDF offers “last mile” finance models that unlock public and private resources, especially at the domestic level, to reduce poverty and support local economic development. UNCDF’s financing models work through three channels: (1) inclusive digital economies, which connects individuals, households, and small businesses with financial eco-systems that catalyze participation in the local economy, and provide tools to climb out of poverty and manage financial lives; (2) local development finance, which capacitates localities through fiscal decentralization, innovative municipal finance, and structured project finance to drive local economic expansion and sustainable development; and (3) investment finance, which provides catalytic financial structuring, de-risking, and capital deployment to drive SDG impact and domestic resource mobilization.