We use Cookies. Read our Terms
OPEC Fund Debuts On The Capital Market
First bond raised US$1 billion in development finance
The OPEC Fund started 2023 with a bang. For the first time in its history, the institution went to the capital market and raised US$1 billion for a three-year, fixed-rate sustainability bond with a 4.5 percent coupon due January 26, 2026.
Attracting strong demand from investors globally, the bond was almost three times over-subscribed. The proceeds of the issuance will be used to finance key sustainable development projects.
Delivering sustainable development is the OPEC Fund’s mission and the bond proceeds will be allocated according to specific criteria defined in a designated SDG Bond Framework focusing on food security, healthcare, infrastructure, education, employment and renewable energy.
The framework is aligned with the Sustainability Bond Guidelines 2021, the Green Bond Principles 2021 and the Social Bond Principles 2021 of the International Capital Market Association and has received a positive opinion from the research firm Sustainalytics.
This additional financial strength is critical in the face of growing needs and demands worldwide. The OPEC Fund’s initial engagement in projects and development programs often attracts much larger institutions and investors, which enables the institution to leverage its contribution many times over.
The additional funds will allow the OPEC Fund to further expand its activities and deepen its impact in line with its long-term strategy. Director- General Abdulhamid Alkhalifa said: “The success of our inaugural bond issuance is testament to the financial strength of our institution and grounded in our mission and mandate honed over our 47-year history. It is also a call to action to deepen our role in achieving sustainable development. This placement is providing us with means to deliver even more and even better. And deliver we will.”
The launch of the OPEC Fund inaugural bond was marked with an event at the London Stock Exchange on March 20. The Market Open ceremony allows a newly-listed company to open the trading on a given day.
The OPEC Fund SDG Bond was admitted to the Official List of the Financial Conduct Authority and to trading on the Main Market of the London Stock Exchange. Notes are also displayed on the London Stock Exchange’s Sustainable Bond Market.