General Background
A. OFID is a multilateral development finance institution which seeks to promote cooperation between Member States of the Organization of the Petroleum Exporting Countries (OPEC) and other developing countries. It does this mainly by providing financial resources to assist the latter group of countries in their economic and social advancement.
A. Our vision
To aspire to a world where Sustainable Development, centered on human capacity-building, is a reality for all.
Our mission
To foster South-South Partnership with fellow developing countries worldwide with the aim of eradicating poverty.
A. OFID was established in January 1976 by the then 13 Member Countries of OPEC. The idea was to create a collective aid facility as discussed at the Conference of Sovereigns and Heads of State of OPEC Member Countries in Algiers, Algeria, held from March 4-6, 1975. The facility would consolidate the assistance extended by the Member Countries; and its resources would be additional to those already made available by OPEC states via other bilateral and multilateral channels.
A. OFID presently has 12 member countries (Ecuador withdrew from OFID as of December 31, 1993): Algeria, Gabon, Indonesia, the Islamic Republic of Iran, Iraq, Kuwait, the Great Socialist People’s Libyan Arab Jamahiriya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and the Bolivarian Republic of Venezuela.
A. OFID, originally named “The OPEC Special Fund,” was intended to be a temporary facility, created as an international fund collectively owned by the countries contributing to it. In May 1980, the “OPEC Fund” became a fully-fledged, permanent international development agency. As part of its new corporate identity, in 2006 the institution included the acronym “OFID” in its legal name, which replaced the former use of “The Fund.”
A. 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 include public sector loans for development projects and programs, balance of payments support and debt relief under the Heavily Indebted Poor Countries (HIPC) Initiative; trade financing; support to private enterprises; grants for technical assistance, food aid, research and humanitarian relief work; and contributions to the resources of other development organizations whose activities benefit developing countries.
A. The bulk of OFID's assistance has been directed to those countries which are least developed and most in need of financial support. Oil imports of these countries are insignificant. The higher-income developing countries account for the larger part of the total oil imports of developing countries, but they receive lower priority from OFID.
Historically, OPEC aid began in the early 1960s, long before any oil price adjustments had taken place. It was not conceived as compensation for higher oil prices, but as an expression of solidarity with other non-OPEC developing countries in need of such assistance.
A. The two institutions have different functions. OFID's main concern is the reinforcement of financial cooperation between its Member Countries and other developing countries; the Secretariat's principal aim is to coordinate the petroleum policies of Member Countries and to determine the best means for safeguarding their interests, individually and collectively. Both institutions are located in Vienna, Austria, but are housed and managed separately. The supreme authority in OFID is the Ministerial Council, comprising the ministers of finance of Member Countries, whereas in the case of the OPEC Secretariat, it is the Conference, consisting of the ministers of energy.
A. The Ministerial Council is OFID's supreme authority and comprises the ministers of finance of the Member Countries or any other authorized senior representatives. The Council issues policy guidelines to be followed by the Governing Board, approves the replenishment of OFID's resources, authorizes the administration of special funds and makes major policy decisions. It normally meets once a year.
The Governing Board comprises one representative and one alternate each from Member Countries. Subject to directives issued by the Ministerial Council, the Board is responsible for the conduct of OFID's general operations. It stipulates, in particular, policies with regard to the use of OFID's resources and usually meets four times a year.
The Director-General, who is appointed by the Ministerial Council, is the chief executive officer of OFID. He conducts the day-to-day business of OFID and is its legal representative.
A. OFID's financial statements are audited by a firm of independent accountants appointed by the Ministerial Council which, itself, approves the audited accounts.
A. OFID's resources consist of voluntary contributions made by its Member Countries and the accumulated reserves derived from its various operations.
A. At the close of the year 2011, contributions pledged by Member countries totaled $3,435 million, out of which $3,079 million was direct contributions to OFID.
A. Loan repayments are added to OFID's resources to be used for future operations.
A. All developing countries, with the exception of OFID Member Countries, are in principle eligible for OFID assistance. The least developed countries, however, are given higher priority. Also eligible for OFID assistance are international institutions whose activities benefit the developing countries.
OFID loans are given regardless of a country’s political or religious orientation; the main consideration is the economic viability of a project and its contribution to development in the recipient countries.
A. According to the Agreement establishing OFID, the intention of OPEC Member Countries is to help other developing countries only, and not the Member Countries themselves. OFID is seen as a means of cooperation between its founders and other developing countries in an expression of South-South solidarity. Member Countries are only eligible for assistance from OFID in the case of disaster relief or within the context of a regional program.
A. OFID does not maintain offices or staff outside its headquarters in Vienna, Austria; please refer to the address and contact information below:
The OPEC Fund for International Development (OFID)
Parkring 8, A-1010 Vienna, Austria
P.O. Box 995, A-1011 Vienna, Austria
Tel: +43-1-515 64-0
Fax: +43-1-513 92 38
Email: info@ofid.org
OFID was invited by the Republic of Austria to establish its headquarters in Vienna to complement the many other international organizations that were also located in the city as part of the United Nations complex of organizations. OFID has a headquarters agreement with its host country, under which it enjoys all the privileges and immunities within the general framework of the Vienna Convention on Diplomatic Relations, 1961.
Public Sector Operations
A. Although all developing countries are in principle eligible for OFID assistance, OFID's limited resources demand that an order of priority is established in the allocation of this assistance. This order is based on an objective assessment of the economic and financial situations prevailing in each developing country.
A. Lending activities are carried out within the framework of lending programs which determine the countries eligible for assistance, the types of loans to be extended and the amount of financial resources to be allocated to each country.
A. They are established on the basis of objective and recognized criteria, taking into consideration social, economic and financial indicators.
A. The terms applied to OFID's public sector loans depend upon the type of loan and the economic conditions prevailing in a recipient country.
A. Generally, for public sector financing, the government of the eligible developing country requests a loan from OFID through the minister in charge of mobilizing foreign assistance, usually the finance minister. Following receipt of this request, OFID Management examines the type of assistance being requested. In considering a project or a program for financing, the viability and economic soundness in each case have to be ascertained through appraisal. In the case of balance of payments assistance, the need has to be demonstrated. If OFID Management is satisfied, it then recommends to the Governing Board the type of assistance envisaged.
A. OFID responds to official requests from eligible countries rather than promoting particular projects itself. This falls in line with OFID's objective of responding to governments' priorities and choices, rather than imposing its own. A country may propose a project or a program to OFID; OFID may send out a mission specifically to identify suitable projects and programs; projects and programs may be identified through the work of other development finance institutions such as the World Bank Group, regional development banks and national and multilateral development aid agencies of OPEC countries, or United Nations specialized agencies.
A. Yes, although appraisal may also be entrusted to an appropriate international development agency, a UN specialized agency or a qualified institution of a Member Country.
A. OFID seeks to complement the work of other development finance agencies and aims at avoiding a duplication of effort. It also benefits from the expertise of other institutions. OFID, therefore, often co-finances projects already appraised and approved by other development institutions. Similarly, the administration of a large proportion of OFID's project and program loans is entrusted to appropriate development aid agencies.
In almost all cases, the recipient countries contribute to the financing of the local costs involved in OFID-assisted projects.
A. It is not OFID's practice to recommend to the governments of the recipient countries that they undertake reforms or adopt new policies designed to improve their countries' economic performance. But OFID, nevertheless, requires proper implementation of the assisted projects and/or programs.
A. The impact of a development project or program on the economy of a recipient country is a major – but not the only – factor in a decision to finance or not. The social impact of the project or program is also taken into consideration.
A. No. OFID's procurement guidelines follow the general principles of international competitive bidding which is open to all sources. The loans are not tied to procurement from Member States of OFID or from any other countries. However, the margin of preference is allowed for goods and services obtainable in the recipient country or originating in other developing countries.
A. OFID believes in the importance of regional cooperation among developing countries. A number of countries, owing to their size or their uneven endowments of physical and human resources, are often unable to bring about a change in their economic situation if they have to rely only on themselves. OFID's objective is to promote cooperation and assist regional endeavors.
A. Since its inception, a large share of OFID's assistance has been directed to the least developed countries, cumulatively representing more than one-half of OFID's total lending commitments.
A. OFID does not fix sectoral priorities; it lends on the basis of the needs and priorities of a particular country as that country itself perceives them. The needs vary from country to country and, of course, may change over time. For instance, in recent years demand has increased for operations supporting the energy sector. Need has also arisen for investment in social sectors, such as health and education, as well as in other important areas such as transportation and agriculture.
A. The area of co-financing. A large number of OFID projects have been financed by a combination of OFID money and bilateral and/or multilateral funding.
A. Yes. Aid coordination among development finance institutions helps improve the effectiveness of the aid extended by those institutions. OFID is highly conscious of the benefits to be gained from collaborating closely with like-minded institutions. Such cooperation allows for a pooling of financial resources, manpower and skills and helps avoid wasteful duplication of effort. OFID's cooperating partners include the bilateral and multilateral development agencies of OPEC Member States, the specialized agencies of the United Nations System, the World Bank, the European Union, the regional development banks and a host of non-governmental organizations.
Private Sector Facility
A. OFID’s PSF was established in 1998 to accommodate the emerging needs of its partner countries and represents an additional means of helping those countries to achieve their social and economic development objectives.
A. OFID does not exclude any economic sectors from its consideration (except sectors involving gambling, armaments, alcohol and tobacco). Both start-up and expansion projects may be financed. OFID can fund financial institutions, including commercial and development banks, as well as specialized financial institutions such as leasing companies, microfinance providers and housing finance companies. OFID also can lend directly to projects.
A.OFID funds the local private sector and helps to facilitate foreign direct investment. State owned enterprises may also be eligible for financing, as long as they are commercially managed as autonomous enterprises and act as a channel of support for local private enterprises. OFID also supports public-private partnership projects that are operated on private enterprise principles.
A. Private sector instruments include, among others, lines of credit to financial institutions, direct project loans, equity and quasi-equity investments and guarantees.
A. OFID, in accordance with its mandate, does not operate in OPEC Member Countries. OFID invests in many low- and middle-income countries. Most investments are aimed at supporting long-term projects which create new industrial capacity, improve utilities or infrastructure, or contribute to capital markets development. The country concerned usually must conclude an Agreement for the Encouragement and Protection of Investment with OFID as a pre-condition.
A. More information can be found
here.
Trade Finance Facility
A. OFID’s TFF was established in 2006 to broaden the means available to OFID to alleviate poverty and promote economic development. As an integral part of OFID’s programs, the TFF is seen as a distinct, additional assistance window for supporting eligible developing countries in their efforts to achieve growth and prosperity. The Facility seeks out transactions that are developmentally, environmentally and socially sound, applying credit principles in line with standard practices and setting reasonable market-based return targets.
A. The TFF aims at supporting beneficiaries to facilitate their import and export activities and to address their working capital requirements by means of various funded and unfunded financing instruments. OFID cooperates closely with other development finance institutions and commercial banks, complementing the role of these strategic partners.
A.In principle, all low and middle-income developing countries are eligible for TFF support. TFF financing is available to governments, private entities, commercial banks, regional development finance institutions and any other institution active in an OFID partner country.
A. Support for trade is provided through different instruments, including loans, lines of credit and guarantees. Loans are extended directly to clients in beneficiary countries for the financing of imports or exports of a wide range of commodities. Lines of credit to financial intermediaries are provided for pre-/post-shipment or import finance. Guarantees under the TFF are issued by OFID to other development finance institutions and/or commercial banks to increase their trade finance exposure for the benefit of local small businesses.
A. More information can be found
here.
Grant Program
A. OFID’s grant program provides resources for community-based initiatives, humanitarian relief and research, as well as for areas of special need: namely food aid, and operations to combat HIV/AIDS and bring respite to the people of Palestine.
A. OFID’s grant program includes technical assistance for small-scale social causes; sponsorship for research and other intellectual pursuits; and, when occasion demands, emergency aid in the wake of natural disasters, such as earthquakes or flooding.
A.Yes. Through its special grant account for emergency assistance, OFID delivers urgently needed funds to help mitigate the suffering of victims of all kinds of catastrophes. By channeling this aid through specialized relief agencies, such as the IFRC, UNOCHA, UNDRO and WFP, OFID ensures that its support gets delivered swiftly and to where it is most needed.
A. Yes, OFID has a special grant programs for HIV/AIDS, which supports awareness, prevention, screening and treatment activities in countries worst affected by the pandemic. A special Palestine grant program sponsors relief and reconstruction efforts in the West Bank and Gaza. More recently, an Energy Poverty Operations program was implemented in support of initiatives aimed at providing underserved areas with modern energy supplies.
A. More information can be found
here.