Public Sector Lending represents the main pillar of OFID’s activities, accounting for 68% of total, cumulative commitments. Through this window, and as of December 31, 2012, an aggregate US$9,587.3m had been approved in 1,373 concessional public sector loans to 103 developing countries. In keeping with OFID’s mandate, the bulk of these resources has gone to the low-income nations, which continue to receive priority attention, even as the institution has broadened its scope to include more middle-income partners.
All public sector projects are co-financed with the recipient government and frequently with other donors, including the regional development banks and, in particular, the bilateral and multilateral development agencies of OPEC Member States. In line with the principles of aid effectiveness, OFID harmonizes its activities with sister and other organizations in order to streamline joint efforts and avoid duplication or overlap. In the interests of sustainability, capacity building and institution strengthening are integral components of all OFID public sector operations. The projects themselves are demand-driven, reflecting the strategic priorities of the partner countries. On a cumulative basis, operations directed at the transportation, energy and agriculture sectors account for 55% of all public sector lending.
Also included under the umbrella of the public sector is OFID’s contribution to the Heavily Indebted Poor Countries (HIPC) Initiative. OFID has supported the Initiative since its inception in 1996 and to date has provided US$192m in debt relief to 34 HIPC countries.
Activities in 2012
In 2012, Public Sector Lending accounted for 52% of total commitments for the year, with approvals through the window amounting to US$676.7m. The funds supported 39 projects in 32 countries. Africa, home to the majority of LDCs, received the largest share, securing 51.4% of committed resources, followed by Asia with 39.7%, and Latin America and the Caribbean with 8.8%. In keeping with established practice, the sectoral distribution of commitments reflected the priorities of the concerned countries, with transportation (40.6%) and energy (32.3%) together securing almost three-quarters of total approvals. Agriculture projects attracted 11.8%, followed by education with 6.6%. The remainder went to projects supporting health, water supply and sanitation, and multi-sectoral initiatives.