The Organization of Petroleum Exporting Countries (OPEC) Fund for International Development has provided a $50million loan to Africa Finance Corporation to help finance the rebuilding of infrastructure in Africa devastated by COVID-19 pandemic.
AFC is a financial institution with 28 member countries, established to provide financing and private sector-driven solutions for infrastructure, natural resources and industrial projects across Africa.
The OPEC Fund was established by the member countries of OPEC in 1976 with a mandate to drive development, strengthen communities and empower people.
The group is focusing on financing projects that meet essential needs, such as food, energy, infrastructure, employment (particularly relating to micro-small and medium-scale enterprises (MSMEs), clean water and sanitation, healthcare and education.
The loan is part of the OPEC Fund’s effort in aid of Africa’s post-COVID recovery process.
OPEC Fund Director-General, Abdulhamid Alkhalifa, said in a statement on Wednesday that the loan represents the first direct financing co-operation between the two institutions.
Mr Alkhalifa said the proceeds of the 10-year loan to AFC would help address the continent’s well-known infrastructure financing gap.
He said the loan would also support increased financial flows to Africa and contribute to COVID-19 recovery efforts in African economies by freeing up government funds to meet urgent financing needs related to the pandemic.
The AFC President/CEO, Samaila Zubairu said the Corporation has been engaging development partners worldwide to find ways of collaboration to mobilize funds necessary for Africa’s post-pandemic recovery and optimize efficient deployment.
“This loan is in line with AFC’s effort to support the development-vital infrastructure, from energy to transport and commerce, and to return Africa back to the path of sustainable growth and development.
“We are committed to working with the OPEC Fund and other partners as critical enablers of essential infrastructure development,” Mr Zubairu said.
Mr Alkhalifa said Africa’s urgent infrastructure financing needs have become even more pronounced since the onset of COVID-19.
He said the pandemic has hampered economic growth and investment across the continent.
OPEC Fund’s support to AFC, Mr Alkhalifa noted, would help provide sustainable financing for infrastructure development to improve connectivity, transport, logistics, trade and the creation of jobs.
“We look forward to a long and productive partnership with AFC. By working with experienced regional partners, our development impact is amplified,” Mr Alkhalifa said.
To date, AFC has invested over $8.4 billion in projects within 35 African countries.
The OPEC Fund signed a cooperation agreement with AFC in 2017 and this loan marks the beginning of collaboration on the ground.
The OPEC Fund is the only globally mandated development institution that provides financing from member countries to non-member countries.
The organization works in cooperation with developing country partners and the international development community to stimulate economic growth and social progress in low and middle-income countries around the world.
To date, the Group said it approved more than $25 billion for operations in 135 partner countries to build a world where sustainable development is a reality for all.