Press Release

OFID releases Annual Report 2005

54/2006 June 13, 2006, Jeddah, Saudi Arabia
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The 2005 Annual Report of the OPEC Fund for International Development (OFID) was released today, following its adoption by OFID's Ministerial Council, meeting in Jeddah, Saudi Arabia. Published in English, Arabic, French and Spanish, the report details OFID's activities during 2005 and gives an overview of operations since the institution's inception in 1976. Some important highlights are described below:

- By the end of 2005, cumulative commitments stood at US$7,906.4 million and total disbursements had reached US$5,187.5 million.

- In the course of 2005, US$431.934 million was committed in loans and grants, and US$261.654 million was disbursed.

OFID, a multilateral development finance institution established by OPEC Member Countries, seeks to reinforce cooperation between its Member States and other developing nations, principally by providing much-needed financial resources to assist the latter group in their pursuit of economic and social advancement. OFID finances public sector operations in all economic and social sectors, helping to promote economic development and social welfare and to improve living standards. OFID also encourages the growth of productive private enterprise in developing countries through direct support to the private sector. In addition, OFID extends grants for technical assistance, for research and similar activities, and for emergency humanitarian aid. In recent years, it has set up special grant accounts for HIV/AIDS, Palestine and Food Aid. Moreover, OFID financially assists other institutions whose activities benefit developing countries. Since inception and up to the end of 2005, OFID had extended development financing in loans and grants to a total of 119 countries in Africa, Asia, the Middle East, Latin America and the Caribbean and Europe.

In his foreword to the Annual Report, OFID Director-General Mr. Suleiman J. Al-Herbish described 2005 as “a year of notable events,” some positive, such as the outcome of the World Trade Organization meeting in Hong Kong, where it was agreed upon, to make (by 2008) the majority of the exports from the least-developed countries to industrialized nations duty- and quota free. This promise of a more liberalized global trade system was a welcome breakthrough, commented the Director-General, and OFID looked forward to its fulfillment.

Less encouraging events, Mr. Al-Herbish noted, were the decrease in aggregate global output and the fluctuating economic performances across the world that “fueled concerns about ever-widening global imbalances.” Disparities, he added, had been discussed at the United Nation’s Millennium Development Goals (MDGs) assessment summit, where agreement was reached that despite increased levels of aid, available resources would likely “fall short of the need.” World leaders agreed to intensify their efforts to achieve as many of the MDGs as possible by the target date of 2015.

Recounting some of the institution’s achievements in 2005, Mr. Al-Herbish highlighted the approval of US$432 million to co-finance an array of projects and programs in developing regions across the globe. He also discussed OFID’s increased involvement in private sector operations; its participation in the international debt relief initiative; and the replenishment of its special grant accounts which finance ongoing activities in support of the global campaign against HIV/AIDS as well as relief activities in Palestine. In addition, the Director-General noted OFID’s swift response to victims of a severe tropical storm, that hit central America, and survivors of the South Asia earthquake, a spate of disasters that dampened the “hope of progress” for many.

The Director-General also referred to the observance of OFID’s 30th Anniversary; a “significant milestone by any standard.” He affirmed that OFID would “dedicate itself anew to its founding mission”; and with the unwavering generosity of its Member Countries, would “continue to strive for a world where progress is accessible, equitable and sustainable.”

Public sector lending operations

In 2005, OFID approved 36 project loans worth US$289.58 million to 33 countries, helping finance development operations in a range of sectors, with transportation (30%) and energy (22.4%) taking the largest share. Substantial resources were also directed toward the agriculture, health, education, and water supply and sewerage sectors. Some allocations were multi-sectoral.

Cumulatively to the end of 2005, OFID had approved 1,064 public sector loans, amounting to US$6,168.2 million. These loans fell into the following categories:

Project: 807 loans totaling US$4,872.2 million
BOP support: 185 loans amounting to US$724.2 million
Program: 42 loans valued at US$314.8 million
HIPC Initiative: 29 loans worth US$206.9 million
PRGF Trust: 1 loan for US$50 million

Countries in all developing regions of the world have benefited from OFID's lending activities, with Africa receiving a total of 606 loans; Asia 280 loans; Latin America and the Caribbean 166 loans; and Europe 11 loans. In line with its mandate to target the neediest nations, US$3,273.7 million or 54% of OFID's total lending commitments has been channeled to the least developed countries.

Private sector lending operations

By the end of December 2005, cumulative private sector approvals had reached US$417.9 million in support of 83 operations in Africa, Asia, the Middle East, Latin America, the Caribbean and Europe. Approvals for 2005 comprised six loans valued at $33.75 million, nine lines of credit worth US$47 million and one equity investment of US$1.7 million.

Grants

In 2005, OFID approved 62 grants in the total amount of US$27 million, of which US$4.3 million went to finance technical assistance schemes; US$13 million supported projects within the framework of the HIV/AIDS Special Grant Account; US$5.7 million was committed from the Special Grant Account for Palestine; US$1 million went to fund research and similar activities; and, US$3 million helped support emergency relief operations. The technical assistance grants benefited a diverse range of causes, covering primarily initiatives in the health, education and agriculture sectors. In the sphere of emergency assistance, aid was extended to a number of countries in the wake of natural disasters, including Afghanistan, India and Pakistan following the South Asia earthquake, as well as famine relief to Burkina Faso, Mali, Mauritania and Niger. Grants drawn from the Research Account helped finance development-related conferences, training courses and other intellectual pursuits.

In all, some 773 grants valued at US$348.6 million had been cumulatively committed by OFID as of December 31, 2005. Of this sum, US$111.5 million was made available as technical assistance; US$34.2 million was given to finance projects within the framework of the HIV/AIDS Special Grant Account; U$20 million was given to the Food Aid Special Grant Account; US$19 million was approved from the Special Grant Account for Palestine; US$52.1 million was provided in support of emergency relief operations; and US$8.3 million sponsored research and similar activities. In addition, a special grant of US$20 million was extended to the International Fund for Agricultural Development (IFAD), and a contribution of US$83.6 million made to the Common Fund for Commodities.

Support to Other Institutions

Among the various international institutions which have received OFID financing since 1976 are IFAD, which supports rural development (US$861.1 million), and the IMF Trust Fund, which benefits low-income member countries (US$110.7 million).