As investment increases, the importance of the industrial sector in developing countries continues to grow. Not only is the sector an engine of economic growth, it is also a significant source of employment, especially for the ever-rising number of youth new to the job market.
Industrial plants may introduce new products to the market or create a more competitive environment for an existing product. Industry can also save on, or be a source of, foreign exchange, should its products aim to substitute imports or process locally available raw material destined for export markets.
Investments in greenfield or modernization projects ensure the introduction of new, more efficient technologies, while large investments have a ripple effect along the supply chain and help to reinforce the fundamentals of a domestic economy.
OFID supports industrial development through its public, private and trade finance windows. By means of public sector loans, it has helped governments invest in industrial infrastructure and played a key role in attracting private sector investment. Through partnerships with private sector investors, it has helped establish new industries, products and markets. And, to ensure the successful sale of goods between countries, it has supported the import and export of commodities and semi-finished and finished products through its Trade Finance Facility.
As of end-2013, OFID’s cumulative investment in the sector amounted to US$539m and had benefited all sub-sectors, including building materials, steel, fertilizers and chemicals.
In 2013, OFID’s contribution to the industry sector comprised a US$12.0m private sector loan for the establishment in Mozambique of a greenfield aluminum manufacturing plant. The plant will produce some 50,000 tons of rods, wire and conductors per year for use in electricity transmission and distribution.