Public Sector Lending

PublicSector 2017

Context


Public sector operations remain the central pillar of OFID’s work. By the end of 2017, cumulative approvals of some US$13,804.5 million made through this window accounted for about two-thirds (66%) of the organization’s total commitments since inception. In all, 1,544 concessional loans have been agreed with 106 developing countries. Of this total, more than US$10 billion has been channeled to energy-water-food nexus-related operations (supported by the transport sector). All operations supported by OFID respect country development priorities and respond to strategic development objectives.

All public sector operations are co-financed with the recipient government and frequently with other donors, including regional development banks, UN agencies and the bilateral and multilateral development agencies of OPEC Member Countries. This is in keeping with the Global Partnership for Effective Development Cooperation and the four shared principles of development: ownership of development priorities by developing countries; a focus on results; inclusive partnerships; and transparency and accountability. To encourage sustainability, OFID’s public sector operations also focus on capacity building and institution strengthening. 

Also included under the umbrella of public sector operations is OFID’s contribution to debt relief via the Heavily Indebted Poor Countries (HIPC) initiative. OFID has supported the initiative since its inception in 1996, utilizing several mechanisms to provide its relevant share of debt relief to 25 eligible partner countries. These include loans worth US$274 million that were made available to ease the debt burden of these countries, together with debt restructuring operations.  


Activities in 2017


Public sector commitments in 2017 amounted to US$698.8 million or 46% of approvals for the year, compared with US$615.4 million and 47% in 2016. The funds supported 27 projects in 23 countries.

Latin America and the Caribbean
received the largest share, with US$278.5 million or 40% :(including US$91 million in two loans to Bolivia for agriculture and transport projects and US$50 million to Argentina for a water and sanitation project), while Africa received US$239 million or 34% and Asia US$181.3 million or 26%.

The sectoral distribution of public sector approvals reflected the priorities of the recipient countries, with US$251million or 36% of the year’s total going to the transport sector. Agriculture  (US$161.2 million, or 23%), education (US$101.8 million, or 15%), water and sanitation (US$100.3 million, or 14%) and energy (US$73.5 million, or 11%) also attracted significant amounts, with the remainder going to multisectoral operations.


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