Press Release

OPEC Fund releases Annual Report 2004

64/2005 June 15, 2005, Seefeld, Tyrol, Austria
Press inquiries:

The 2004 Annual Report of the OPEC Fund for International Development was released today, following its adoption by the Fund's Ministerial Council, meeting in Seefeld, Austria. Published in English, Arabic, French and Spanish, the report details the Fund's activities during 2004 and gives an overview of operations since the institution's inception in 1976. Some important highlights are described below:

• By the end of 2004, cumulative commitments stood at US$7,474.5 million and total disbursements had reached US$4,925.8 million (see table 1).
• In the course of 2004, US$528.624 million was committed in loans and grants, and US$287.722 million was disbursed (see table 2).

The OPEC Fund, a multilateral development finance institution established by OPEC Member Countries, seeks to reinforce cooperation between its member states and other developing nations, principally by providing much-needed financial resources to assist the latter group in their pursuit of economic and social advancement. The Fund finances public sector operations in all economic and social areas, helping to promote economic development and social welfare and improve living standards. It also encourages the growth of productive private enterprise in developing countries through direct assistance to the private sector. In addition, the Fund provides grants for technical assistance, for research and similar activities, and for emergency humanitarian aid. In recent years, it has set up special grant accounts for HIV/AIDS, Palestine and Food Aid to Africa. Moreover, the Fund financially assists other institutions whose activities benefit developing countries. Since inception and up to the end of 2004, the Fund had extended development assistance in loans and grants to a total of 116 countries in Africa, Asia, the Middle East, Latin America and the Caribbean, and Europe.

In his foreword to the Annual Report, Director-General Mr. Suleiman J. Al-Herbish described 2004 as “an encouraging year” for the South, with developing countries registering their highest aggregate growth rate in almost three decades. He cautioned, however, that “systemic vulnerabilities” remained, along with “problems of sustainable growth with equity.” Calling for a re-thinking of trends in development cooperation, Mr. Al-Herbish urged donors “to focus on basic needs and on areas of critical under-investment, such as agriculture and infrastructure.”

The Director-General stressed the importance of harmonization and partnership in the quest for poverty eradication. The Fund, he said, would continue to strengthen ties with agencies whose efforts were complementary to its own. Steps had been taken in 2004, for instance, to move the Fund’s longstanding relationship with the Common Fund for Commodities toward new horizons. “Similar efforts will be made in the years ahead to reinforce other existing partnerships and establish new relationships…to maximize the impact of the Fund’s presence on the ground,” he said.

Recounting some of the institution’s achievements in 2004, Mr. Al-Herbish highlighted the successful completion of the Fund’s 15 th Lending Program, under which 100 concessional public sector loans totaling US$824.4 million had been approved. He remarked also on the Fund’s increased participation in private sector operations; its support to the international debt relief initiative; its ongoing contribution to the global campaign against HIV/AIDS; and its assistance toward relief and rehabilitation activities in Palestine. In addition, th e Director-General noted the swift response of the Fund and its Member States to the Southeast Asiatsunami tragedy, which he described as “an appalling conclusion to a year that, otherwise, had held out prospects of renewal for many nations.”

Public sector lending operations

In 2004, the Fund approved 42 project loans worth US$413.4 million to 37 countries, helping finance development operations in a range of sectors, with transportation (35.5%) and agriculture (16.7%) taking the largest shares. Substantial resources were also directed towards the multi-sectoral, energy, health, education and water supply and sewerage sectors.

Cumulatively to the end of 2004, the Fund had approved 1,024 public sector loans, amounting to US$5,845.7 million. These loans fell into the following categories:

Project:     771 loans totaling US$4,582.6 million

BOP support:     185 loans amounting to US$724.2 million

Program:     42 loans valued at US$314.8 million

HIPC Initiative:    25 loans worth US$174 million

PRGF Trust:     1 loan for US$50 million

Countries in all developing regions of the world have benefited from the Fund's lending activities, with Africa receiving a total of 583 loans, Asia 272 loans, Latin America and the Caribbean 158 loans and Europe 10 loans. In line with its mandate to target the neediest nations, US$3,143.9 million or 54% of the Fund's total lending commitments has been channeled to the least developed countries.

Private sector lending operations

By the end of December 2004, cumulative private sector approvals had reached US$335.4 million in support of 67 operations in Africa, Asia, the Middle East, Latin America, the Caribbean and Europe. Approvals for 2004 comprised 18 loans valued at $91.5 million, one line of credit worth US$5 million and one equity investment of US$0.81 million.

Grants

In 2004, the Fund approved 52 grants in the total amount of US$17.93 million, of which US$2.95 million went to finance technical assistance schemes; US$6.59 million supported projects within the framework of the HIV/AIDS Special Grant Account; US$5.775 million was committed from the Special Grant Account for Palestine; US$761,000 went to fund research and similar activities; and, US$1.85 million helped support emergency relief operations. The technical assistance grants benefited a diverse range of causes, covering primarily initiatives in the health, education and agriculture sectors. In the sphere of emergency assistance, aid was extended to a number of countries in the wake of natural disasters, including the Southeast Asia tsunami, as well as to victims of the humanitarian crisis in Darfur. Grants drawn from the Research Account helped finance development-related conferences, training courses and other intellectual pursuits.

In all, some 711 grants valued at US$321.6 million had been cumulatively committed by the Fund as of December 31, 2004. Of this sum, US$107.2 million was made available as technical assistance; US$21.2 million was given to finance projects within the framework of the HIV/AIDS Special Grant Account; US$20 million was given to the Food Aid Special Grant Account; US$13.3 million was approved from the Special Grant Account for Palestine; US$49.1 million was provided in support of emergency relief operations; and US$7.3 million sponsored research and similar activities. In addition, a special grant of US$20 million was extended to the International Fund for Agricultural Development (IFAD), and a contribution of US$83.6 million made to the Common Fund for Commodities.

Support to Other Institutions

Among the various international institutions which have received OPEC Fund support since 1976 are IFAD, which supports rural development (US$861.1 million), and the IMF Trust Fund, which benefits low-income member countries (US$110.7 million).

Table 1 - Total commitments and disbursements as of December 31, 2004 (in millions of dollars)

Table 2 - Commitments and disbursements in 2004 (in millions of dollars)