OPEC Fund Debuts US$1bn SDG Bond

The OPEC Fund for International Development, a development institution established by the member governments of the Organization of the Petroleum Exporting Countries (OPEC), has successfully raised $1 billion from its first-ever bond sale.

The three-year bond, which will pay investors an interest rate of 4.5%, will be classified as a “sustainable development” bond and the proceeds will be earmarked for food security, healthcare, infrastructure, education, employment, and renewable energy projects.

The bond was priced using its Sustainable Development Goal (SDG) bond framework, with Credit Agricole CIB acting as the sole sustainability advisor. The bond sale attracted strong demand from investors globally, with central banks from the Middle East, Europe, and Asia, and other types of “official” institutions, including from the United States, accounting for 62% of the bond’s buyers. Commercial banks made up another 19%, while asset managers, insurance, and pension funds accounted for 9% and 8% respectively.

Geographically, 52% of the buyers were from the Europe, Middle East, and Africa region, 27% from Asia-Pacific and 21% were from North America. The OPEC Fund’s Head of Funding, Martine Mills Jansen, stated that the bond pricing is a major milestone for the OPEC Fund and the culmination of several years of intensive work.

The OPEC Fund is committed to financing development projects in low- and middle-income countries in line with its South-South cooperation mandate. The bond proceeds will be allocated according to the specific criteria defined in the SDG Bond Framework, with a focus on food security, healthcare, infrastructure, education, employment, and renewable energy.