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.  OFID's headquarters are located in Vienna, Austria. The current Director-General is Suleiman Jasir Al-Herbish of Saudi Arabia.
- 1 OFID headquarters
- 2 History
- 3 Member Countries
- 4 Means
- 5 Resources
- 6 Beneficiaries
- 7 Operations
- 8 Contributions to other organizations
- 9 Energy for the Poor Initiative (EPI)
- 10 See also
- 11 References
The OFID Headquarters Building (located in Vienna's first district, on the Ringstraße) was the residential palace of the Austrian Archduke Wilhelm Franz Karl. Built between 1864 and 1868 to the architectural design of Theophil von Hansen (1813-1891), the palace was sold to the German Order of Knights (Teutonic Order) in 1870 and used as headquarters of the Grand Master, the last of whom was Archduke Eugen. From 1894, it served as the palace of both the Grand and German Masters, acquiring the name, Palais Deutschmeister. In 1938 following the dissolution of the German Order of Knights, the building was seized by National Socialist (Nazi) Germany and, in 1942, it was handed over to the police authorities. Between 1945 and 1975, it served as headquarters of the Vienna police. After an interregnum, the building became the property of OFID.
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.
- IR Iran
- Saudi Arabia
- United Arab Emirates
OFID provides financial assistance in a number of ways, with the distribution between the different types of aid changing over time as conditions in recipient countries evolve and needs alter. The methods of funding have included:
- Extending concessionary financial assistance in the form of loans for development projects and programs, balance of payments support and trade financing
- Participating in the financing of private sector activities in developing countries
- Providing grants in support of technical assistance, food aid, research and similar activities, and humanitarian emergency relief
- Contributing to the resources of other development institutions whose work benefits developing countries
OFID's resources consist of voluntary contributions made by its Member Countries and the accumulated reserves derived from the institution's various operations.
All developing countries, with the exception of OPEC Member Countries themselves, are in principle eligible for OFID assistance. The least developed countries, however, are accorded higher priority and have consequently attracted the lion's share of OFID's resources. Over the years, OFID has spread its presence to 134 countries, of which 53 are in Africa, 43 in Asia, 31 in Latin America and the Caribbean, and 7 in Europe. OFID's total approved commitments as at the end of December 2013, stood at US$16,653m. 
Public sector operations
Public Sector Lending represents the main pillar of OFID’s activities, accounting for more than two-thirds of total, cumulative commitments. Through this window, and as of December 31, 2013, an aggregate US$11,118m had been approved in 1,411 concessional public sector loans to 103 developing countries. In keeping with OFID’s mandate, the bulk of these resources has gone to the low-income nations, which continue to receive priority attention, even as the institution has broadened its scope to include more middle-income partners.
All public sector projects are co-financed with the recipient government and frequently with other donors, including the regional development banks and, in particular, the bilateral and multilateral development agencies of OPEC Member States. In line with the principles of aid effectiveness, OFID harmonizes its activities with sister and other organizations in order to streamline joint efforts and avoid duplication or overlap. In the interests of sustainability, capacity building and institution strengthening are integral components of all OFID public sector operations. The projects themselves are demand-driven, reflecting the strategic priorities of the partner countries. On a cumulative basis, the water–food–energy nexus, supported by the transportation sector, had attracted 76% of all public sector lending as of end-2013.
Also included under the umbrella of the public sector is OFID’s contribution to the Heavily Indebted Poor Countries (HIPC) Initiative. OFID has supported the Initiative since its inception in 1996 and to date has provided US$269.8m in debt relief to 26 HIPC countries. 
Private sector operations
The Private Sector Facility (PSF) was created in 1998 in response to the changing economic policies in OFID’s partner countries. Support for the private sector, through the provision of loans and equity investments, is seen as a natural adaptation, enabling OFID to continue to serve as wide a range of countries as possible while remaining responsive to their development needs.
The goals of the PSF are to encourage the growth of productive private enterprise and to boost the development of local capital markets. Successful interventions stimulate economic growth – creating jobs and generating income – and thereby leading to poverty alleviation.
Partnering with other development finance institution's (DFIs) and commercial banks, the Facility supports commercially viable, privately owned enterprises. State owned institutions may also be eligible, if they are commercially managed as autonomous enterprises and provided they act as a channel of support for local private enterprises. In addition, public-private partnership projects are supported when operated on private enterprise principles. Projects selected are required to have a high developmental value, thus complementing OFID’s mandate.
A priority of the Facility is support for micro, small and medium-sized enterprises (MSMEs), whose activities drive economic growth and play a key role in employment generation and poverty alleviation. The PSF provides support to MSME’s mainly through intermediation to financial institutions, including national and regional development banks, commercial banks, leasing companies, specialist micro-finance institutions and investment funds.
By the end of December 2013, US$2,041m had been committed for 197 operations in support of private entities in Africa, Asia, Latin America and Europe. 
Trade Finance Facility
Established in 2006, OFID’s Trade Finance Facility (TFF) targets developmentally and socially sound transactions to facilitate import and export activities and to address working capital requirements in developing countries. The general principles guiding the Facility include developmental impact and South-South cooperation. TFF operations are available to governments, private entities, commercial banks, regional development finance institutions and any other institution active in an OFID beneficiary country. OFID products include import-, export- and pre-export financing, warehouse receipt financing, SME trade support, working capital financing and unfunded risk participations.
By the end of December 2013, US$1,949m in lines of credit and US$2,000m in risk-sharing guarantee programs had been approved. 
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. 
Since OFID's inception, technical assistance (TA) operations have constituted its core grant activity. TA grants are extended to national and regional development projects that aim at sustainable development and poverty reduction, and that serve the poorest segments of society, particularly those in the Least Developed Countries (LDCs). Women and children, especially, are accorded high priority. TA grants are awarded largely on the basis of the type of project and its expected outcomes, the number of beneficiaries and the recipient country’s socioeconomic situation. As of December 31, 2013, OFID had provided some US$573.5m in outright grants across all programs, working with UN agencies and a host of international and national NGOs, among many other partners, to meet the needs of vulnerable populations. 
Research and Similar Intellectual Activities
This type of assistance focuses on activities that increase South-South and North-South cooperation and enhance capacity-building, including human resource development, particularly in the LDCs. A heavy emphasis is placed on research topics and studies of particular relevance to poorer countries and on the advancement of science and technology. Human capital is enhanced through the sponsorship of seminars, training courses and workshops. 
Emergency Aid Operations
Emergency assistance from OFID is extended to help mitigate the suffering of victims of all kinds of catastrophes around the world, including OFID Member States. In the interests of sustainable development, OFID often follows up emergency assistance with conventional, low-interest loans to aid longer-term reconstruction in devastated regions. Emergency aid is channeled through specialized relief agencies, such as the IFRC, UNHCR, OCHA, and the WFP. 
HIV/AIDS Grant Program
OFID's HIV/AIDS Program was launched in June 2001, with an initial endowment of US$15 million, following authorization from the Ministerial Council. Subsequent replenishments have boosted the Account to US$80m. Today, OFID is working with a broad coalition of strategic partners to fight the pandemic in over 90 countries. Interventions cover many areas, including awareness, prevention, testing and counseling, as well as care, treatment, support and vaccine development.
Palestine Grant Program
OFID has been extending assistance to Palestine since 1979. However, in response to growing and critical need, OFID took steps to intensify its operations in Palestine by setting up a special program in 2002 to accelerate the delivery of assistance. Endowed with its own resources, this program provides support to areas of long-term concern, such as basic infrastructure and essential health and social services. In times of urgent humanitarian need, it also channels emergency assistance to help deliver food, medical supplies and other items. 
Contributions to other organizations
Common Fund for Commodities (CFC)
OFID has been a long-standing supporter of the Common Fund for Commodities (CFC), having made available a total of US$83.6m in support of the institution. This amount is made up of a voluntary contribution of US$46.4m to the Second Account of the CFC and another US$37.2m to cover the subscriptions of 35 least developed countries to the directly contributed capital of the CFC. Within the context of the second account, resources totaling US$32 million had been committed in support of commodities projects in 29 countries in Africa, 15 in Asia and six in Latin America.
On the occasion of the 30th Annual Session of the OFID Ministerial Council on June 17, 2009, three new countries (DR Congo, Senegal, and Mozambique) were added to the list of eligible countries to benefit from subscriptions (and obtain subscription payments) to the CFC's First Account. OFID maintains a keen interest in the activities of the CFC and enjoys observer status in the two highest organs of the institution.
International Fund for Agricultural Development (IFAD)
OFID played a significant role in the establishment of IFAD, channeling US$861.1 million in contributions from OPEC Member Countries towards the agency’s initial capital and first replenishment. Since IFAD's creation, OPEC member states have maintained their firm support of the agency, contributing to additional replenishments of its resources. In addition, OFID itself has given a further US$20m as a special contribution from its own resources.
International Monetary Fund (IMF) Trust Fund
Via OFID, financial resources valued at US$110m were transferred by a number of OPEC Member States to the IMF-administered Trust Fund which was established in May 1976. Representing profits accruing to seven of these countries from the sale of gold held on their behalf by the IMF, these resources were allocated to provide concessional balance of payments assistance to eligible low-income IMF member countries.
Energy for the Poor Initiative (EPI)
OFID is convinced that human development and energy use are intrinsically linked. Without energy to fuel industry and support business and social services such as hospitals and schools, there can be no economic or social progress.
OFID believes that the alleviation of energy poverty - although not a goal on its own - is central to the achievement of the eight internationally embraced Millennium Development Goals (MDGs). This is why OFID describes the Eradication of Energy Poverty as the “9th MDG”. Over the years, OFID and its Member Countries have shown their concern for poverty and its attendant human misery.
At the Second Summit of OPEC in Caracas, Venezuela, in September 2000, the Heads of State and Government described poverty as “the biggest environmental tragedy” confronting the world.
In line with this position, the OPEC leaders at their Third Summit in the Kingdom of Saudi Arabia in November 2007, committed in the Riyadh Declaration to continue to align the programs of their aid institutions, including those of OFID, with the objective of achieving sustainable development and eradication of energy poverty in the developing countries.
In June 2008, the Custodian of the Two Holy Mosques, King Abdullah Bin Abdul-Aziz Al Saud of Saudi Arabia announced the Energy for the Poor Initiative and called upon OFID and the World Bank to play a leading role in development of the program.
In May 2009, the same topic was the focus of discussions at the G8 Energy Ministers Meeting in Rome. The meeting concluded with a joint statement from the G8 Energy Ministers, the European Commissioner and the Energy Ministers of several other countries, including OFID Member Countries Algeria, Indonesia, Libya, Nigeria and Saudi Arabia. In the statement, the Ministers pledged their support to initiatives to combat energy poverty, including King Abdullah’s Energy for the Poor Initiative. They also urged OFID - and a number of other institutions - to prepare strategies and identify financing mechanisms to develop energy networks and integrate energy markets in Africa.
In March 2010, energy poverty was again in the spotlight when in Cancun, Mexico, world energy ministers, from producing and consuming countries, met for the 12th International Energy Forum (IEF). OFID delivered a statement at a special session of the Forum devoted to the “Role of Energy in Fostering Human Development.” The statement highlighted OFID’s efforts toward the alleviation of energy poverty.
In 2010, the UN announced the decision to mark 2012 as the Year of Sustainable Energy for All (SE4ALL), an initiative that launched international efforts to achieve universal energy access by 2030. Various initiatives, most significantly, the 2012 SE4ALL global initiative, brought the world’s attention to the serious issue of energy poverty and the need to tackle this in order to meet the MDGs and eradicate poverty. Due to the significance of the energy-poverty nexus, and in order to maintain the momentum of efforts to tackle this issue, the UN General Assembly also announced a “Decade for Sustainable Energy for All” to run from 2014 to 2024, directing the international community’s attention to meeting this challenge.
Mr. Al-Herbish was appointed as one of the 39 principals in the SE4All High-level Group. The OFID Director-General is also a member of the SE4All Advisory Board, an elite panel representing business, finance, government and civil society. These appointments were in recognition of OFID’s leading role in the global fight against energy poverty.
OFID was amongst the earliest institutions to take up the call to address this urgent issue. As a development finance institution, OFID has been widely recognized as one of the pioneers to champion this theme in the international agenda, fighting energy poverty through the channel of its Energy for the Poor Initiative (EPI), which was launched in 2008. In June 2012, the OFID Ministerial Council issued a Ministerial Declaration which states that OFID is committing a minimum of US$1 billion to financing the Energy for the Poor Initiative, further augmenting OFID’s contribution to battling energy poverty.
OFID’s advocacy was instrumental in highlighting the vital link between energy and development. The institution has supported a number of projects that range from the construction and rehabilitation of power plants and installation of natural gas pipelines, to the construction of wind farms and solar energy systems. As of December 31, 2013, energy operations accounted for almost US$3.3b, or 21%, of OFID’s cumulative commitments, co-financing operations in 85 countries.
- Organization of the Petroleum Exporting Countries (OPEC)
- International Fund for Agricultural Development (IFAD)
- International Monetary Fund (IMF)
- The World Bank
- Common Fund for Commodities (CFC)
- Arab Bank for Economic Development in Africa (BADEA)
- Arab Monetary Fund (AMF)
- Islamic Development Bank (IsDB)
- Kuwait Fund for Arab Economic Development (KFAED)
- Sustainable Energy for All (SE4All)