New financing of over US$300 million approved by OFID, along with implementation of Climate Action Plan.
The OPEC Fund for International Development (OFID) has approved more than $300 million in financing in the first quarter of 2023, in support of its Climate Action Plan. The OPEC Fund is committed to ensuring a positive impact on people and the planet through its efforts in Africa, Asia, and Latin America. Three out of the four projects approved by the OPEC Fund’s Governing Board directly support climate finance. OFID Director-General Dr. Abdulhamid Alkhalifa said that these efforts will help partners enhance their climate policies while boosting resilience to climate change.
In September 2022, the OPEC Fund adopted its first dedicated Climate Action Plan, which commits the organization to increase the share of its climate financing to 40% of all new financing by 2030. The plan also aims to mainstream climate action into the project cycle, increasing climate adaptation, mitigation, and resilience investments in energy, transport, agriculture, food, water, and smart cities.
The OPEC Fund Governing Board approved various projects, including a €50 million loan to Armenia, which will support policies for increasing climate resilience and mitigation. The loan will finance environmental impact assessments and series of reforms concerning energy efficiency and air quality standards.
A $150 million loan to Colombia will support policies for the promotion of sustainable and resilient growth by fostering the government’s capacity to plan climate action and promote energy transition. The loan will also focus on the promotion of climate-smart agriculture and food systems.
A $100 million loan to India will help finance a 56 km ring road around one of the country’s largest cities, serving a population of more than 4 million people. The financing will also be supported by a $410,000 grant, which will contribute to project preparation and implementation. This project will improve the city’s transport infrastructure and reduce greenhouse gas emissions.
Another project to Seychelles with a $20 million loan will help the country strengthen policies to promote inclusive and sustainable growth. The project aims to undertake climate-related reforms to land development, consumer data protection, and fishing regulations. The project will also support investment in renewable energy and energy efficiency, particularly in the building sector.
The OPEC Fund’s Climate Action Plan aligns with the United Nations’ Sustainable Development Goals and the Paris Agreement, which seek to limit global warming to well below 2 degrees Celsius above pre-industrial levels. The OPEC Fund’s initiatives aim to support developing countries to adapt to the impacts of climate change while transitioning to low-carbon and climate-resilient economies.
