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OPEC Fund promotes resilient, sustainable economy and climate action in Paraguay
April 5, 2023: The OPEC Fund for International Development (the OPEC Fund) is providing a US$100 million sovereign policy-based loan (PBL) to Paraguay to strengthen the country’s sustainable economic development and increase its resilience to climate change. The program – also supported with a US$300 million loan by CAF – the Development Bank of Latin America – aims to improve the efficiency and effectiveness of public resources for implementing sustainable policy measures.
OPEC Fund Director-General Dr. Abdulhamid Alkhalifa said: “The current severe droughts have demonstrated Paraguay’s vulnerability to climate change. This program will help combat adverse effects and secure long-term economic sustainability. Our loan will support Paraguay in adopting measures to strengthen its resilience and reduce its vulnerability to climate change.”
Policy-based lending contributes to countries' financing needs by providing fast-disbursing resources conditional on policy and institutional reforms that help strengthen the economic framework and support the creation of conditions for sustainable and inclusive growth. These loans support a reform agenda and the implementation of policies agreed between co-financiers and the government.
Paraguay’s program, supported by the OPEC Fund and CAF, focuses on two main components: sustainable development and fiscal sustainability. Policy actions include, among others, approving a national electric mobility strategy, updating the National Determined Contributions of the Paris Agreement and measures to protect water resources. Fiscal sustainability entails policy actions focusing on public spending and concrete actions to promote private-sector financing for public works.
The OPEC Fund has supported Paraguay’s sustainable development since 1978, with more than US$600 million loans to date in support of transport, energy, agriculture, and water & sanitation 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 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$24 billion to development projects in over 125 countries with an estimated total project cost of US$190 billion. The OPEC Fund is rated AA+/Outlook Stable by Fitch and AA, Outlook Positive by S&P. Our vision is a world where sustainable development is a reality for all.