Lending Operations
As has become customary, the Fund continued to make the world's
least developed countries (LDCs) the focus of its attentions during 1998.
Handicapped by structural weaknesses and low levels of external earnings,
these 48 nations suffer severe impediments to growth and are becoming
increasingly marginalized from the mainstream of the world economy. Infrastructure,
both physical and social, is generally inadequate, health and literacy
indicators are in decline, and nutritional standards a permanent and common
concern. For many LDCs, periods of civil and political strife have added
to their difficulties, displacing large numbers of people from their homes
and livelihoods and destroying infrastructure and productive assets.
Yet another burden borne by LDCs is that of massive external debt, a problem
being addressed by the OPEC Fund in cooperation with the international
donor community via the Heavily Indebted Poor Countries (HIPC) Initiative.
Launched in 1997, the Initiative seeks to reduce the external debt
of eligible countries to a sustainable level through a strategy of burden-sharing
among all creditors. The Fund is honoring its responsibilities under the
scheme and, in 1998, approved the delivery of debt relief to six countries,
namely Bolivia, Burkina Faso, Guyana, Mali, Mozambique and Uganda.
In line with its commitment to according LDCs special treatment, the Fund
approved loans totaling $99.066 million to 17 LDCs during the course of
1998. This represented 63.6% of the Fund's overall lending commitment
for the year. Six other developing countries took $56.58 million in loans
from the Fund in 1998.
| Lending to the Least Developed Countries (LDCs) | |||
| (in millions of US dollars) | |||
| Type of loan | LDCs | Other Developing Countries | Total |
| In 1998 | |||
| Project Loans | 87.006 | 56.580 | 143.646 |
| Program Loans | 12.000 | -- | 12.000 |
| Total | 99.066 | 56.580 | 155.646 |
| (Percentage of total loan commitments) | (63.6) | (36.4) | (100.0) |
| Cumulative to the end of 1998 | |||
| Project Loans | 1,568.446 | 1,384.699 | 2,953.145 |
| BOP Support Loans | 439.780 | 284.450 | 724.230 |
| Program Loans | 183.470 | 121.826 | 305.296 |
| Total | 2,191.696 | 1,790.975 | 3,982.671 |
| (Percentage of total loan commitments) | (55.0) | (45.0) | (100.0) |
Project Lending
Project loans approved in 1998 by the OPEC Fund numbered 24 and
amounted to $143.646 million. The loans were given to 23 developing countries
to finance operations in the sectors of transportation, education, agriculture
and national development banks. In a growing trend, resources were also
committed to support many projects of a multi-sectoral nature. For the
second year in succession, transportation took the lion's share of lending
with 44.4% of committed funds. Multi-sectoral operations attracted an
additional 22%, with the remainder divided between education (17.4%),
agriculture (9.3%) and national development banks (7.0%).
Loans to the transportation sector benefited 12 countries and amounted
to a total of $63.726 million. Bangladesh secured $10 million to improve
rural networks in the agricultural district of Barisal; Benin took $4.376
million to upgrade the Savalou-Djougou Road; Burkina Faso obtained $7
million to bituminize National Road No. 6; and Cambodia acquired $6 million
for a primary roads restoration project. Road upgrading activities are
also to be pursued in Chad, which secured $7 million, The Gambia ($1.93
million), Laos ($4.42 million) and Malawi ($7 million), while the Maldives
aims to use its $1.5 million to carry out improvements at Malé International
Airport. Other recipients of loans for road construction include Mali,
with $5.5 million for the Nioro-Gogui route, Mauritania, with $4 million
to extend that same route from Gogui to Aioun El Atrouss, and Tanzania,
with $5 million to rehabilitate Zanzibar's Kidimni-Kitope road.
Multi-sectoral loans to finance projects of a more diverse nature were obtained by Bolivia ($5 million), Honduras ($5 million), Kyrgyzstan ($3.58 million), Palestine ($8 million) and the Philippines ($10 million). Bolivia aims to construct access roads and irrigation schemes within the framework of an extensive rural development project; Honduras is to pursue small-scale social and economic infrastructure development; and Kyrgyzstan plans to strengthen the delivery of rural health and education services in the southern provinces of Osh and Jalal-Abad. With its loan, Palestine proposes rehabilitating basic infrastructure in the poor and marginalized communities of the West Bank and Gaza, while the Philippines will address the reconstruction needs of war-torn southern regions by restoring essential services and facilities.
H.E. Mr. Lamine Bolivogui, Ambassador of Guinea (left),
|
|
For education, loans were approved to three countries and totaled
$25 million. Haiti obtained $5 million to expand access to basic education
and upgrade teaching programs; India took $10 million to pursue improvements
at upper primary and secondary levels in Tripura State; and Madagascar's
$10 million loan will be deployed in the provinces of Fianarantsoa, Toliara
and Mahajanga where schools need to be repaired following cyclone damage.
Fund loans in 1998 for agriculture and agro-industry went to Guinea ($4.5 million) to intensify crop production in the Fouta Djallon region; to Mali ($3.84 million) for the expansion of irrigated agriculture on the banks of the Bafing River; and to Nicaragua ($5 million) in support of a scheme to boost yields among smallholders in rural departments of the Pacific and Central regions.
In the sector of national development banks, a $10 million line of credit was extended to Vietnam to encourage income-generating activities among the rural poor.
| Project loans approved in 1998 - geographical and sectoral distribution | ||||||
| (in millions of US dollars) | ||||||
| Country/region | Transportation | National Development Banks | Agriculture & agro-industry | Education | Other* | Total |
| Benin | 4.376 | 4.376 | ||||
| Burkina Faso | 7.000 | 7.000 | ||||
| Chad | 7.000 | 7.000 | ||||
| Gambia, The | 1.930 | 1.930 | ||||
| Guinea | 4.500 | 4.500 | ||||
| Madagascar | 10.000 | 10.000 | ||||
| Malawi | 7.000 | 7.000 | ||||
| Mali | 5.500 | 3.840 | 9.340 | |||
| Mauritania | 4.000 | 4.000 | ||||
| Tanzania | 5.000 | 5.000 | ||||
| Africa | 41.806 | 8.340 | 10.000 | 60.146 | ||
| Country/region | Transportation | National Development Banks | Agriculture & agro-industry | Education | Other* | Total |
| Bangladesh | 10.000 | 10.000 | ||||
| Cambodia | 6.000 | 6.000 | ||||
| India | 10.000 | 10.000 | ||||
| Kyrgyzstan | 3.580 | 3.580 | ||||
| Laos | 4.420 | 4.420 | ||||
| Maldives, The | 1.500 | 1.500 | ||||
| Palestine | 8.000 | 8.000 | ||||
| Philippines, The | 10.000 | 10.000 | ||||
| Vietnam | 10.000 | 10.000 | ||||
| Asia | 21.920 | 10.000 | 10.000 | 21.580 | 63.500 | |
| Country/region | Transportation | National Development Banks | Agriculture & agro-industry | Education | Other* | Total |
| Bolivia | 5.000 | 5.000 | ||||
| Haiti | 5.000 | 5.000 | ||||
| Honduras | 5.000 | 5.000 | ||||
| Nicaragua | 5.000 | 5.000 | ||||
| Latin America and the Caribbean | 5.000 | 50.000 | 10.000 | 20.000 | ||
| Total | 63.726 | 10.000 | 13.340 | 25.000 | 31.580 | 143.646 |
| (Percentage) | (44.4) | (7.0) | (9.3) | (17.4) | (22.0) | (100.0) |
* "Other" also includes multi-sectoral projects.
Program Lending
Two program loans with a combined value of $12 million were approved by the Fund in 1998. Burundi and Rwanda each secured $6 million to finance the importation of petroleum products.