Public Sector Lending

Public sector operations remain the central pillar of OFID’s work. At the end of 2018, cumulative approvals of US$14.52bn made through this window accounted for nearly 62% of the organization’s commitments since its establishment. In total, 1,572 concessional loans have been agreed with 106 developing countries. All OFID-supported operations are aligned with its partner countries’ development priorities.

Public sector operations are co-financed with the governments of recipient countries 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$274m that were made available to ease the debt burden of these countries, together with debt restructuring operations.

Activities in 2018

Public sector commitments in 2018 amounted to US$731.7m or 48.8% of approvals for the year, compared with US$698.8m and 46% in 2017. The funds supported 27 projects in 23 countries. Africa received the largest share, with $294m or circa 40%, while Latin America received US$210m or 28.7%, Asia US$141.6m or 19.3% and Europe US$86.1m or 11.8%

The sectoral distribution of public sector approvals reflected the priorities of the recipient countries, with US$296.1m or 40% of the year’s total going to the transport sector. Water and sanitation attracted US$162m (or 22%), health US$91.6m (or 12.5%), energy US$75m (or 10.2%), and agriculture US$77m (or 10.5%), with the remainder of US$30m going to multisectoral operations.