OFID at a Glance

A brief history

At the First OPEC (Organization of the Petroleum Exporting Countries) Heads of State Summit in Algiers, Algeria in 1975, the Finance Ministers of Member Countries proposed the creation of a new multilateral financial facility to channel OPEC aid to developing countries.

Known initially as the ‘OPEC Special Fund,’ this facility was one of several bilateral and multilateral development institutions set up at around this time by the OPEC and Arab countries. Its resources were additional to those already earmarked for official development assistance (ODA) by the OPEC nations.

The Fund, which was originally intended to be a temporary facility, started operations in August 1976 with an initial endowment of $800 million and within little over a year its resources had doubled. By the end of 1977 it had extended 71 loans to 58 developing countries as well as channelling donations from its Member Countries to other development institutions including the IMF Trust Fund and the International Fund for Agricultural Development (IFAD). The OPEC Fund became a fully fledged, permanent international development agency in May 1980.

Related document

Agreement Establishing the OPEC Fund

The Aims

OFID's key aim is to foster social and economic progress in the developing world through the provision of concessional financing for developing countries. However, OFID's work goes beyond simply dispensing aid; one of its central aims has always been to advance ‘South-South’ solidarity in every way available to it. It does this by promoting cooperation in many spheres among countries of the developing world. It also does what it can to champion the cause of the developing world in the international arena.

In this regard, OFID has been closely associated with two multilateral institutions of great relevance in the developing world: IFAD and the Common Fund for Commodities (CFC).

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OFID and IFAD: partners in the fight against rural poverty
OFID and the Common Fund for Commodities

The Means

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 contributing to the resources of other development organizations whose activities benefit developing countries.

Related documents

HIPC Initiative debt relief operations in 2007

Related links

Commitments 2008
Commitments 2007

The Resources

OFID's resources consist of voluntary contributions made by OPEC member countries and the accumulated reserves derived from its various operations. At the close of the year 2007, contributions pledged by Member countries totaled $3,435.0 million, out of which $2,463.15 million was direct contributions to OFID.

The Beneficiaries

All developing countries, with the exception of OPEC member countries, are in principle eligible for Fund assistance. The least developed countries, however, are accorded higher priority and have consequently attracted the lion's share of OFID's resources. Today, 121 countries from the developing world - Africa, Asia, Latin America, the Caribbean, the Middle East and Europe - have benefited from OFID's assistance.

Related links

Country profiles
Africa
Asia
Europe
Latin America and the Caribbean

Commitments

By the end of May 2008, the level of cumulative development assistance extended by OFID stood at US$9,648 million and disbursements reached US$6,056 million and were broken down as follows:

Public sector financing:

- 907 project loans valued at US$6,104 million
- 42 program loans amounting to US$315 million
- 185 balance of payments support loans worth US$724 million
- 35 HIPC Initiative loans totaling US$251 million
- 1 loan to the PRGF Trust of the IMF of US$50 million

Private sector financing:

- 115 operations valued at US$734 million

Trade finance operations:

- US$79 million in lines of credit and US$35 million in risk-sharing guarantees had been approved and US$38 million disbursed.

Grant operations:

- 968 grants worth a total of US$418 million

-International Fund for Agricultural Development (IFAD): US$861.1 million

-International Monetary Fund (IMF) Trust Fund: US$110.7 million