OPEC Fund Mobilizes $1 Billion with Sustainable Development Goal Bond

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The OPEC Fund for International Development, a multilateral development finance institution headquartered in Austria, has raised $1 billion in its first-ever benchmark bond issue in global capital markets.

The OPEC Fund is a multilateral development finance institution established by the Organization of Petroleum Exporting Nations. It is a globally mandated development institution that provides financing from member countries to non-member countries exclusively.

The bond was priced using its Sustainable Development Goal (SDG) bond framework. The proceeds from the 3-year fixed-rate sustainability bond will be used to finance or refinance sustainable development projects aligned with the OPEC Fund’s multi-sectoral development mission and contribute to achieving the SDGs.

The instrument attracted very broad interest, with 52% of investors coming from Europe, the Middle East, and Africa, 27% from Asia-Pacific, and 21% from North America. In terms of investor type, central banks and official institutions accounted for 62%, banks 19%, asset managers 9%, and insurance/pension funds accounted for 8%.

The bond proceeds will be allocated according to the specific criteria defined in the SDG Bond Framework, focusing on renewable energy, food security, healthcare, infrastructure, education, and employment.

The Framework is aligned with the Sustainability Bond Guidelines 2021, Green Bond Principles 2021, and Social Bond Principles 2021 published by the International Capital Market Association and has received a positive opinion from Second Party Opinion Provider Sustainalytics.

OPEC Fund Director-General Abdulhamid Alkhalifa said, “The robust demand for our inaugural benchmark is a testament to the confidence that investors have in the OPEC Fund and our long-standing development-focused mandate. It also confirms the appetite for sustainable investments globally. At a time when there is an increasing need for development finance, the OPEC Fund is proud to have achieved this milestone.”

Last week, the government of India announced the sale of sovereign green bonds worth ₹80 billion (~$986 million) through an auction by the Reserve Bank of India, Mumbai, on January 25. The auction will be in two parts of ₹40 billion ($485.56 million) each. The first one is for a 5-year tenure, and the second is for a 10-year tenure through a yield-based uniform price method.

Earlier this month, France-based energy firm ENGIE raised €2.75 billion (~$2.9 billion) after the successful closing of its triple-tranche green bond issue.