BAKU, Azerbaijan, November 22. The OPEC Fund for International Development (the OPEC Fund) is significantly expanding its climate-related portfolio, President Abdulhamid Alkhalifa told Trend in an exclusive interview.
"As you know, the OPEC Fund launched its Climate Finance Action Plan two years ago. It was an ambitious plan. In 2021, only 20 percent of our portfolio was climate-related, but we set targets to increase that to 25 percent by 2025 and 40 percent by 2030. Last year, we surpassed our 2025 goal, with climate-related initiatives accounting for 34 percent of our 2023 projects. So, we are progressing ahead of schedule.
In addition to these targets, the OPEC Fund is also making significant strides in climate adaptation and mitigation. We are collaborating with other institutions and making strong progress on issues such as biodiversity. For example, at COP28 last year, we launched a nature-based solutions hub in partnership with the Asian Development Bank (ADB), which focuses on biodiversity and other nature-related challenges," he said.
Alkhalifa added that the OPEC Fund is also collaborating with other institutions to address the critical issue of clean cooking.
"This issue affects around 2.6 billion people globally, including those in Asia, Latin America, Africa, and other countries. Three years ago, we started our clean cooking campaign, which we are currently extending to numerous nations in Asia and Africa," he stated.
Furthermore, the president stated that the OPEC Fund is also working with all necessary stakeholders to align its efforts with the COP29 agenda.
“Regarding the carbon market, we are collaborating with others to create an efficient and sustainable carbon market in different parts of the world. I would also like to congratulate Azerbaijan for achieving Article 6.4, which focuses on carbon markets. The announcement is a significant step forward for the future of carbon markets.
We are collaborating with everyone to accomplish the required results. While not the exclusive focus, carbon markets are a component of this. At a side event, I attended a seminar on increasing energy efficiency and tripling renewable energy capacity, and we are totally dedicated to achieving these objectives. We are working hard to make them a reality.
This is, of course, a key call from COP28, and it remains a crucial target for COP29. We are determined to achieve these objectives. The OPEC Fund has a strong portfolio in renewable energy, not just in terms of projects but also in providing policy support to countries. For example, in Latin America, we have provided loans to help create the policy environments necessary to support renewable energy, specifically in Panama and Colombia,” he said.
Alkhalifa noted that the OPEC Fund has made significant progress in Central Asia and the Caspian region.
"We have supported a wind project here in Azerbaijan, with a capacity of 240 megawatts in the Khizi-Absheron region. We are also working with the private sector, which is key to the success of these projects. The involvement of the private sector ensures that these projects are sustainable, as they will continue to be supported by the market over the long term. It’s a market-based approach," he said.
He further specified that in Central Asia, the OPEC Fund is working with Tajikistan to support the Rogun Hydropower Plant (HPP), a major renewable energy project, with a $100 million loan. In addition, the OPEC Fund has financed wind and solar projects in Uzbekistan. The president noted that both are renewable energy initiatives, and the Fund is eager to expand its efforts in the region.
Beyond Central Asia, Alkhalifa emphasized that the OPEC Fund has a strong portfolio of renewable energy projects in various parts of the world, including Africa, Latin America, and the Middle East.
"For example, we’ve been involved in renewable energy projects in Jordan for many years. Some of these projects are now 10 to 15 years old and continue to operate as expected. This demonstrates that our focus is not just on launching projects but on ensuring their long-term sustainability through market-based solutions," he said.
The president added that the OPEC Fund has been working with Azerbaijan for a long time. The OPEC Fund has built a strong relationship with the government and is currently providing technical assistance to support the country’s green transition.
"That involves many aspects, but one particularly interesting aspect that I found is Baku's air quality. We are providing technical assistance to the government in this area as part of a broader technical assistance program for the green transition. The green transition is a broad concept, but it encompasses many specific actions that need to be taken," he said.
In conclusion, Alkhalifa noted that COP29 is well organized. "I hope that everyone will come to an agreement on the desired outcomes of this meeting. This meeting is not just about gathering but about agreeing on concrete steps forward for the benefit of humanity in the long run. I hope that, just as the organization has been successfully managed, everyone will also reach consensus on the final outcome," he said.
The OPEC Fund for International Development is a multilateral development finance institution established in 1976. Its 12 member countries are: Algeria, Ecuador, Gabon, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, the United Arab Emirates, and Venezuela. It is the only globally mandated development institution that provides financing exclusively from member countries to non-member countries.
To date, the OPEC Fund has committed over $27 billion to development projects in over 125 countries with an estimated total project cost of more than $200 billion. The OPEC Fund is rated AA+/Outlook Stable by Fitch and AA+, Outlook Stable by S&P.
