Development News 2024 Q4

Boosting hydropower in Bhutan 

OPEC Fund signs first loan in the Himalayan kingdom 

A US$50 million loan to Bhutan, the OPEC Fund’s first in the Himalayan kingdom, will support the development of two hydropower plants, aimed at strengthening Bhutan’s energy security. Nestled in the Himalayas, Bhutan has enormous hydropower potential, boasting over 35,000 MW of clean renewable energy from more than 150 sites nationwide. The country has so far developed just 7 percent of its hydropower potential. 

The two new plants – Gamri (45 MW) in the east of the country and Begana (25 MW) in the west – will mainly cover local demand through mini grids, but will have the option to plug into Bhutan’s main grid, which already exports energy to neighboring countries. The facilities are expected to improve power reliability for around 50,000 households in key regions including Trashigang, the most densely populated area of the country and the primary route for trade with the capital Thimphu. 

Strengthening agricultural development in Benin 

A US$26 million loan to Benin will bolster the Horticulture Development Support Project (PADMAR-E) aimed at enhancing food security and increasing the income of small-scale horticulture farmers. 

The project is co-financed with the International Fund for Agricultural Development (IFAD), which is providing US$15 million in financing. PADMAR-E is expected to directly benefit approximately 16,000 households with almost 100,000 people in the West African country, of whom 40 percent are women and 50 percent young people. The focus will be on improving market access for farmers, enhancing productivity and supporting project implementation. 

First OPEC Fund sustainability-linked financing to boost agriculture in Africa 

The OPEC Fund’s first sustainability-linked loan of US$40 million to ETC Group will strengthen food systems and support the livelihoods of more than 600,000 smallholder farmers across sub-Saharan Africa. 

The financing, part of a US$394 million package, will support one of Africa’s largest agricultural commodity supply chain managers. Sustainability-linked loans are a financing tool that tie lending terms to meeting environmental, social and governance targets. The loan incentivizes ETC Group to improve farmer livelihoods, reduce environmental impacts and enhance food security. 

Advancing clean energy and infrastructure in Madagascar 

US$35 million loan kickstarts OPEC Fund’s clean cooking program 

Two landmark agreements with the Republic of Madagascar will boost support for sustainable socio-economic development and energy transition: a US$35 million loan will support the SMART Clean Cooking Project, while a US$30 million loan will help develop transport infrastructure through the Facilitation of Commerce Corridors Project (PACFC II). The improved infrastructure will provide better access to markets, healthcare and education for over 1.5 million people, significantly reduce travel time and boost trade flows. 

More than two billion people around the world rely on kerosene, wood, charcoal and other biomass for daily cooking. The OPEC Fund selected Madagascar because of the urgency and magnitude of the country’s needs. Just 1.6 percent of the population has access to clean fuels. Indoor air pollution from traditional cookstoves causes 17,000 deaths every year and is the primary cause of child mortality. 

Both loans reinforce the OPEC Fund’s long-standing partnership with Madagascar. 

Boosting local businesses in Uzbekistan 

The OPEC Fund signed a US$30 million loan agreement with the Joint Stock Innovation Commercial Bank Ipak Yuli (Ipak Yuli Bank) to expand access to financing for micro, small and medium-sized enterprises in Uzbekistan, including women-owned businesses. 

This is the OPEC Fund’s first direct loan to a privately-owned bank in Uzbekistan and a significant step in its growing partnership with the country. It complements a five-year, US$500 million partnership framework signed earlier in 2024 to support Uzbekistan’s development priorities, including private sector expansion and economic modernization. 

Supporting SMEs and agriculture in Uzbekistan 

A US$40 million loan to Sanoat Qurilish Bank (SQB), formerly known as JSCB Uzbek Industrial and Construction Bank (Uzpromstroybank), will support small and medium-sized enterprises and the agriculture sector in Uzbekistan. 

The loan will enhance access to finance for local businesses and agribusinesses, helping them grow, create jobs and contribute to sustainable economic development. 

Boost to local businesses and climate action in Armenia 

A US$10 million loan agreement with Evocabank CJSC will support micro, small and medium-sized enterprises in Armenia, the backbone of the local economy. Lending will focus on women-led businesses as well as energy efficiency and renewable energy projects to promote climate action. Armenia has registered rapid growth in recent years and the provision of financing is critical to turn this into a durable expansion, benefiting businesses and people. 

Helping the green transition in Côte d’Ivoire 

A €60 million loan to Côte d’Ivoire will upgrade infrastructure and boost economic competitiveness in the West African country’s transport and energy sectors. 

Phase I of the Economic Transformation and Inclusive Governance Program (PATEGI) aims to accelerate the green transition of the transport and electrical energy sectors by increasing resources while ensuring inclusive, sustainable management of public finances. 

Dominican Republic sees first OPEC Fund private sector operation 

The OPEC Fund signed its first private sector operation in the Dominican Republic, a key milestone in expanding support in Latin America and the Caribbean. 

The US$17.5 million operation with Banco Múltiple Promerica de la República Dominicana (Banco Promerica) will support the growth of small and medium-sized enterprises and women-led businesses in the Dominican Republic. 

The financing aims to facilitate access to funding for underserved businesses, fostering sustainable economic development and financial inclusion. The financing will address the significant financing gap local businesses, particularly those led by women, are facing. 

Pledging US$1 billion for sustainable development in Latin America 

The OPEC Fund and CAF-Development Bank of Latin America and the Caribbean signed a new Cooperation Framework Agreement to enhance their partnership in promoting sustainable development across Latin America. 

The agreement focuses on co-financing infrastructure projects and fostering economic growth in the region. Under the agreement, the OPEC Fund aims to contribute up to US$1 billion in co-financing for public sector projects over the three-year period from 2024 to 2027. 

Enhancing human capital in Jordan 

A US$100 million loan will support the Jordan Human Capital Program, which will assist the government’s policy and institutional efforts to improve the effectiveness of social sectors and promote resilience, including protecting households from climate shocks. 

Some of the program’s other actions include improving the management of the civil health insurance fund, enhancing access to healthcare in remote regions and expanding early childhood education options. 

Strengthening cooperation with the World Bank in climate action, food security and infrastructure 

The OPEC Fund and the World Bank Group signed a Memorandum of Understanding and a Co-Financing Framework Agreement to enhance cooperation on key global development challenges and boost efficiencies in project implementation. 

The agreements reinforce the institutions’ commitment to joint efforts in addressing the energy-food-water nexus, promoting climate-friendly investments and fostering regional cooperation and connectivity in an efficient and cost-effective way. The World Bank is the OPEC Fund’s largest co-financing partner. 

Leveraging Tajikistan’s energy transition 

An initial US$25 million loan will support the construction of the Rogun hydropower plant (HPP), a key project of Tajikistan’s strategy for renewable energy development and energy security. 

The loan is the first tranche of a US$100 million OPEC Fund financing facility for the project, which is expected to have a transformative impact on the wider Central Asian region. 

The Rogun HPP is a hydropower complex designed as a multipurpose dam for generating electricity, regulating water and reducing the risk of floods and droughts. With a height of 335 meters, the dam will be the tallest in the world, and the HPP will have a total generation capacity of 3,780 MW. 

In addition to meeting Tajikistan’s energy demand, the facility is also expected to generate electricity for export to neighboring countries, promoting the use of renewable and clean energy and reducing carbon emissions. 

Increasing connectivity in Oman 

A US$180 million loan with Oman will be provided as a first tranche of a total approved loan of US$392 million in support of the Khasab-Daba-Lima Road Project. 

The road will improve connectivity in the Musandam Governorate by constructing a two-lane single carriageway asphalt road, spanning approximately 70 km, between the cities of Khasab, Daba and Lima, facilitating better access to markets and ensuring safer transport of goods and people.