OPEC Fund for International Development

OPEC FUND FOR INTERNATIONAL DEVELOPMENT

The OPEC Fund for International Development (OFID) is a multilateral development finance institution established in 1976 by the Member States of the Organization of the Petroleum Exporting Countries (OPEC). OFID was conceived at the Conference of the Sovereigns and Heads of State of OPEC Member Countries, which was held in Algiers, Algeria, in March 1975. A Solemn Declaration of the Conference “reaffirmed the natural solidarity which unites OPEC countries with other developing countries in their struggle to overcome underdevelopment,” and called for measures to strengthen cooperation between these countries.

OFID’s objective is to reinforce financial cooperation between OPEC Member Countries and other developing countries, by providing financial support to the latter for their socioeconomic development. The institution's central mission is to foster South-South Partnership with fellow developing countries worldwide with the aim of eradicating poverty.

Following the First OPEC Summit in Algiers, Algeria, in 1975, Member Countries expressed their commitment to assist the developing countries through a collective financial facility. As a result, in 1976, the Finance Ministers of Member Countries met and established the OPEC Special Fund, through which Member Countries would channel aid to developing countries. The OPEC Special Fund started its operations in 1976, with initial resources of about $800 million. By the end of 1977 it had extended 71 loans to 58 developing countries, and had channeled donations from its Member Countries to other development institutions, including the International Monetary Fund (IMF) Trust Fund and the International Fund for Agricultural Development (IFAD).

As a result of its successful performance, Member Countries decided in 1980 to convert the temporary facility into a permanent legal entity called the OPEC Fund for International Development (OFID). OFID became a fully-fledged, permanent international development agency in May 1980. The latest replenishment of US$1 billion was approved in June 2011 by the institution's supreme authority, the Ministerial Council, as a direct response to the increasing needs of developing countries and the negative impact of the financial crisis on their economies.

OFID’s grant program delivers much needed resources for a wide range of activities that for various reasons cannot be financed through lending. Although grant assistance accounts for less than 4% of total cumulative commitments, OFID considers such projects to be especially deserving, as they address basic needs and make a real difference in people’s everyday lives. In the framework of grants, assistance is extended to humanitarian aid and social development operations through six grant programs: Technical Assistance, Research & Similar Activities, Emergency Relief Aid, HIV/AIDS, Energy Poverty and Palestine. The incipient energy poverty program is a particular priority and complements the financing provided through other mechanisms in support of OFID’s Energy for the Poor Initiative.

OFID’s grant program delivers much needed resources for a wide range of activities that for various reasons cannot be financed through lending. Although grant assistance accounts for less than 4% of total cumulative commitments, OFID considers such projects to be especially deserving, as they address basic needs and make a real difference in people’s everyday lives. In the framework of grants, assistance is extended to humanitarian aid and social development operations through six grant programs: Technical Assistance, Research & Similar Activities, Emergency Relief Aid, HIV/AIDS, Energy Poverty and Palestine. The incipient energy poverty program is a particular priority and complements the financing provided through other mechanisms in support of OFID’s Energy for the Poor Initiative.

By the end of December 2013, over 1,500 grants, amounting to over US$573m had been extended.