Somalia, Saudi Arabia, and OPEC Fund Sign $36 Million Agreement to Boost Economic Recovery

Viena, Austria(Mogadishu24)-In a significant move to support Somalia’s economic recovery, the OPEC Fund, Saudi Arabia, and Somalia have entered into a collaborative arrangement aimed at reducing Somalia’s debt burden and restarting financing operations in the country. The transaction was signed by Dr. Abdulhamid Alkhalifa, President of the OPEC Fund, Mohammed Al-Jadaan, Minister of Finance of Saudi Arabia, and H.E. Bihi Iman Egeh, Minister of Finance of Somalia.

This agreement aligns with the IMF and World Bank’s Enhanced Heavily Indebted Poor Countries (HIPC) initiative and includes several key elements designed to stabilize and boost Somalia’s economy:

• Bridge Loan from Saudi Arabia: Saudi Arabia will provide a bridge loan to clear Somalia’s arrears with the OPEC Fund.
• OPEC Fund Loan: The OPEC Fund has approved a US$36 million loan to support Somalia’s development projects.
• Grants for Project Implementation: Two separate grants totaling $6.06 million will be allocated to support project implementation in collaboration with the United Nations Development Programme (UNDP).

“We have reached an agreement to settle the outstanding $36 million USD arrears with the OPEC Fund today. We are grateful for the support from the Kingdom of Saudi Arabia with the bridge loan to facilitate this,” said Somalia’s Finance Minister, Bihi Iman Egeh.

Minister Egeh emphasized that this agreement is a milestone in Somalia’s ongoing debt relief negotiations, which are crucial for the country’s macroeconomic stability and economic recovery. The agreement will also unlock new resources from the OPEC Fund for national development initiatives.

“This is another milestone in the successful ongoing debt relief negotiations that supports Somalia’s macroeconomic stability and economic recovery. The signing of today’s agreement will also unlock new resources from the OPEC Fund for our national development,” Minister Egeh added.

The collaborative efforts between Somalia, Saudi Arabia, and the OPEC Fund underscored the importance of international cooperation in addressing economic challenges and fostering sustainable development. This agreement is expected to pave the way for further economic growth and stability in Somalia.