A Long and Winding Road

Khaled Al-Zayer is Regional Director, East & Southern Africa at the OPEC Fund, which he joined in 2007. Prior he worked at Saudi Aramco in Business Services and Planning. A native of Saudi Arabia, he holds degrees in business and economics from the King Fahd University of Petroleum and Minerals in Dhahran and the University of Oregon, USA.  

Mahmoud Khene is Regional Director, West & Central Africa at the OPEC Fund, which he joined in 2002. Prior he held senior advisory positons in his home country Algeria, working on the reform of the health system. He is a graduate of the University of Vienna, the University of London and worked as a Researcher at the Austrian Academy of Sciences. 

OPEC Fund Quarterly: When did your involvement in Africa start and what have been the business highlights to date? 

Khaled Al-Zayer, Director, Eastern & Southern Africa: My involvement with Africa started 16 years ago when I joined the OPEC Fund as a Public Sector Operations Officer. Until 2021 I was responsible for a portfolio consisting of Egypt, Ethiopia, Eritrea, Sudan, Mauritius, Malawi and Kenya. During that period, I prepared and presented to the Governing Board projects for approval for a total value of US$935 million. 

Mahmoud Khene, Director, West & Central Africa: As a child of the continent, the immensely rich and diverse cultural and civilizational heritage, tumultuous history, vast potential and intricate development challenges facing Africa and its peoples have always been at the core of my interests both professionally and personally. I thus feel I have somehow always been involved, in one way or another. At the OPEC Fund, and on a more operational level, I wish to highlight the first successful PPP operation – the US$2 billion Temane 450 MW power plant in Mozambique signed in 2019 – sponsored by our public and private financing windows. 

OFQ: What is the OPEC Fund’s historic and present role in Africa? 

KAZ: The OPEC Fund’s relations with Africa date back to 1976, when we signed our first ever loan with Sudan, a balance of payment agreement for US$7 million. Since then, we have come a long way: To date, the OPEC Fund has provided US$13.3 billion in financing in 48 countries through 912 private and public sector projects in all areas of the economy where we offer support. Our role is to provide financial resources and work closely with our partner countries to address their needs and contribute to the achievement of the United Nations’ Sustainable Development Goals (SDGs). 

MK: The OPEC Fund was established in a particular historical context as a means to foster South-South cooperation and solidarity, with a special emphasis on the most deprived regions and countries. From the outset, African nations received the most attention from OPEC Fund member countries and the continent received the bulk of our financial support. As an institution of the South, we leverage our strategic position and fruitful cooperation established over the years with partner countries and development finance institutions to optimize financial flows to Africa while achieving more sustainable and greater development impact. 

OFQ: The OPEC Fund is now in the second phase of its 2030 Strategic Framework. What does that mean for the engagement in Africa? 

KAZ: The second stage focuses on implementation and impact. The OPEC Fund’s operational approach reflects the need to maximize development impact and ensure greater relevance to our partner countries. Our public and private sector teams will seek solutions for our partner countries based on an assessment of their development priorities and our capacity to deliver. 

OFQ: What are the sectors you are particularly looking into, where do you see promising developments and what split do you envisage between public and private sector projects? 

KAZ: The OPEC Fund’s financing will be focused on strengthening sustainable and climate-resilient infrastructure, deepening its commitments to developing human and institutional capacity, while ensuring equitable economic opportunities in its partner countries. Food security will also be a focus area in Africa. 

MK: The public sector is indeed called upon to provide critical financing to promote an enabling environment conducive to catalytic private capital investments. Innovative financing instruments will certainly help in the process and are actually being considered actively. 

OFQ: Africa is rich in resources, yet poor by average living standards. How can this gap be closed and a situation created where Africa becomes the first beneficiary of its own wealth? 

KAZ: Closing the wealth gap in Africa and ensuring that the continent benefits from its resources will require sustained efforts and international collaboration. A multifaceted approach should include measures to improve governance, combat corruption, diversify economies, invest in infrastructure, promote education and workforce development, enhance regional integration and trade, attract responsible foreign investment, address poverty through social safety nets and foster public-private partnerships. 

MK: It is important to note that there is no one-size-fits-all solution. Each African country has unique challenges and opportunities, so tailoring our strategies to individual country contexts while focusing on transparency and accountability are crucial for success. By addressing these areas, Africa will be able to unlock its full economic potential and improve the living standards of its people while fostering long-term development and sustainability. 

OFQ: In a hugely competitive global economy are there industries or sectors where Africa is leading with technology and know-how? How can such efforts produce stronger results? 

KAZ: Africa has seen significant growth and innovation in sectors such as mobile banking, agriculture, renewable energy, health tech and e-commerce. To strengthen its position, investments are needed in research and development, education and skills development, infrastructure, fostering of public-private partnerships, establishment of supportive regulatory frameworks, improvement of access to capital, cross-border collaboration and entrepreneurship. Africa has the potential to lead in various technology-driven sectors, but continued commitment as well as addressing unique regional challenges will be key to achieving stronger results and sustaining growth. 

MK: Africa’s strongest capital is its youth. The critical challenge will be to create the conditions to tap into the next generation’s formidable innovative thrust. 

OFQ: Africa has been promised billions of dollars for climate action, yet actual transfers are falling far short. Can Africa cope with the climate crisis by itself? If not, how can the needed funds be mobilized? 

KAZ: A multi-pronged approach is essential to mobilize funds to address the climate crisis in Africa. This involves engaging with international climate finance mechanisms, developing comprehensive climate investment plans, fostering public-private partnerships, issuing green bonds, mobilizing domestic resources through innovative financing mechanisms, participating in carbon markets, exploring climate insurance, facilitating technology transfer and enhancing local community involvement. Climate change is a global challenge and collective efforts are crucial to ensure that Africa and other vulnerable regions can build resilience and adapt to a changing climate. 

OFQ: What will a failure to meet the Paris Agreement targets mean for Africa? And if Africa suffers, can the world ignore it? 

MK: Given its vulnerability to the impacts of climate change, failing to meet the Paris targets will have significant and potentially devastating consequences for Africa. Since 2009, developed countries have committed to mobilize US$100 billion per year for adaptation and mitigation projects in developing countries. Yet this promise has never been fully met in any year, even though the historical responsibility on this matter lies with developed countries: It is estimated that the African continent is responsible for just 4 percent of historic global greenhouse emissions. 

Adaptation finance in support of structural and behavioral change is a priority for Africa given its vulnerability to the climate crisis. However, global climate finance flows have to date mainly focused on mitigation activities, cutting greenhouse gas emissions and fighting other pollution. There is some good news, though: Adaptation finance saw the largest percentage growth between 2017 and 2020 and in US dollar terms increased from US$30 billion in 2017– 2018 to US$49 billion in 2019–2020, driven mainly by financing from bilateral and multilateral development finance institutions. 

Ignoring Africa would be detrimental to global efforts to combat the worldwide climate crisis. For example, most African countries depend on fossil fuels for their energy needs and without access to adequate climate finance they would not be able to implement their transitions to low-carbon and climate-resilient economies. Rather, they would most likely intensify their fossil fuel dependence to meet their growing energy needs, thereby undermining efforts elsewhere in the world. Climate change and the ensuing devastating effects of vast scale migration on local economies and above all on the well-being of migrants will pose critical challenges to African nations and the rest of the world, in particular Europe. 

OFQ: Africa is also exposed to disruptions in global supply chains, most notably in food supply. Given the choice is between globalization and reshoring, which development model will be better for Africa in the long run? 

KAZ: Africa faces challenges and opportunities in the context of global supply chain disruptions and the ongoing debate between globalization and reshoring. To determine a development model that works for Africa, a balanced approach that leverages both globalization and regional development strategies is crucial. Africa can benefit from global supply chains, while simultaneously focusing on regional integration, infrastructure development and sustainability. Ensuring that the benefits of economic growth are widely shared and that local industries are competitive and adaptable is essential for long-term development and resilience. Ultimately, the right model will vary by country and region, but the principles of balance, sustainability and inclusivity should guide development efforts in Africa. 

OFQ: What was your biggest achievement and what do you see as your proudest moment during your service for the benefit of Africa? 

KAZ: During my 16 years at the OPEC Fund I have had the opportunity to lead or join hundreds of projects in Africa. Out of all those, I will mention two projects that are the closest to my heart. The first is the construction of the Cancer Treatment Center in Lilongwe, Malawi, approved in June 2014 (see page 12). The project was originated and financed by the OPEC Fund. It is the first dedicated cancer treatment facility in the country which serves as a referral center and will provide radiotherapy and chemotherapy that was not yet available in the country. The center is expected to provide cancer treatment for more than 2,000 patients per year and to save the lives of thousands of people. 

The second project is the Social Fund for Development in Egypt, approved in 2009. The project supported women-led households, poor families, university graduates and small businesses and farmers. It helped to cut unemployment and provided financial means to improve the livelihoods of about 14,000 families. Because of the success of the first phase, two extensions were approved in 2015 and 2019, respectively. 

MK: I just returned from an inspirational mission to Senegal where the OPEC Fund envisages supporting an ambitious urban modernization program. Designed within the framework of a wider decentralization effort, I was happy to see that national development efforts are increasingly inclusive in their approach in an attempt to reach out to their populations beyond the traditional strongholds, and that the participatory approach pursued truly takes into account the legitimate interests and aspirations of the beneficiaries. Development from the people, for the people. This is indeed very encouraging. 

Every development impact that makes a positive difference in the lives of people is in itself a source of satisfaction. I believe this holds true for any dedicated and genuinely motivated development practitioner. I would consider it a true privilege, because personal commitment towards a noble aspiration and the capacity to take effective action, regardless of its value, strength and extent, remains always just one very minor step on the long and cumbersome path leading to a more balanced, just and sound world. A world where the integrity and dignity of all forms of life are safeguarded. The journey is uncertain, and the way is infinitely long. 

Africa and the OPEC Fund 

Malawi: National Cancer Center 

Approved: June 2014 Total project cost: US$14.75 million OPEC Fund financing: US$13.15 million 

The center is dedicated to cancer diagnosis, classification, treatment, rehabilitation, training and research, focusing on the cancers prevalent in Malawi. It offers adult oncology and palliative care services to the central and northern regions of Malawi, with plans for nationwide expansion following the completion of its radiotherapy unit. 

The completed facility will include patient wards for cancer patients, an outpatient unit, administrative offices, laboratories, radiology facilities, radiotherapy units and nuclear medicine infrastructure. The project is expected to be finalized by January 2024. An oncologist says: “The center has been a real game-changer. We now have easy access and a collaborative environment that allows us to diagnose and treat various forms of cancer effectively.” 

A patient says: “The care and support I received have been life-changing. On a scale of one to 10, I personally give it a nine. Not only did they provide me with treatment, but they also offered emotional support that helped me navigate this challenging phase.” 

Malawi: Water sector projects 

Malawi's water sector faces significant challenges. The country is predominantly rural with limited access to safe water and adequate sanitation facilities, particularly in remote areas. Water scarcity, uneven distribution and unreliable access to clean water are persistent issues. Inadequate infrastructure, pollution and waterborne diseases further compound the problem. 

Mzimba Integrated Urban Water and Sanitation Project 

Approved: September 2015

Completed: June 2019

Total project cost: US$22.8 million

OPEC Fund financing: US$14.9 million 

The project involved rehabilitating, upgrading and expanding the existing water supply system in the town of Mzimba and the provision of solid and liquid waste management facilities to provide reliable and sustainable potable water and sanitation services. 

Achievements included an upgrade of the water treatment plant capacity from 1,500m3 to 12,000m3 per day, installation of 36.96 kilometers water transmission pipelines and 109.4 kilometers water distribution pipelines, installation of 3,270 new water connections including 30 communal water points, construction of a solid waste management facility and 13 sanitation facilities in public schools and markets. 

Testimonial 

“We had to travel four hours to get piped water. Since the project was completed we now enjoy uninterrupted supply of water.”

-Sarah Moyo, local resident from Mzimba 

Karonga Town Water Supply Project 

Approved: March 2018

Total project cost: US$26.7 million

OPEC Fund financing: US$15 million 

The project will extend water supply services and is expected to benefit more than 184,000 people at Karonga Town and surrounding areas. The objective is to improve health and livelihoods through access to a potable and sustainable water supply. It includes the construction of a raw water pipeline, upgrading of the water treatment plant from 12,400m3/day to 28,872m3/ day, installation of 33 kilometers water transmission pipelines and construction of five storage tanks with total capacity of 10,000m3. 

Nkhata Bay Water Supply Project 

Approved: September 2018 Total project cost: US$30.5 million OPEC Fund financing: US$12 million The project involved rehabilitating, upgrading and expanding the existing water supply system and provision of solid and liquid waste management facilities to provide reliable and sustainable potable water and sanitation services. The new water supply system has been extended to cover an area of 316km2. 

Achievements included the upgraded of the water treatment plant capacity from 1,450m3 to 18,572m3 per day, installation of 15.3 kilometers water transmission pipelines and 250 kilometers water distribution pipelines and construction of 23 sanitation facilities in public schools and markets. Installation of 5,000 new water connections is underway including 135 communal water points to extend water supply to low-income areas and households. 

Testimonial 

“We used to suffer amidst plenty. We couldn’t comprehend the dry taps, with Lake Malawi a stone’s throw away. We had to be forced to resort to unprotected water sources which was putting us at risk of contracting water borne diseases such as cholera. Now we never lack tap water.”

-Tilumbe Gondwe, Teacher, St. Joseph Primary School