Photo: Veterans for Peace members at January 2009 protest vs. Israeli attacks on Gaza. Credit: Wikimedia Commons. - Photo: 2021

Honduras Granted USD20 Million OPEC Fund Loan to Help Improve Climate Resilience of Rural Communities

By Reinhard Jacobsen

VIENNA (IDN) — The OPEC Fund for International Development has signed a US$20 million loan agreement with Honduras to co-finance the ‘Northeastern Small Producers’ Economic and Social Inclusion Project—PROINORTE’. The importance of the project lies in the fact that the Central American nation’s economy is primarily agricultural, making it especially vulnerable to natural disasters such as Hurricane Mitch in 1998.

Honduras is bordered to the west by Guatemala, to the southwest by El Salvador, to the southeast by Nicaragua, to the south by the Pacific Ocean at the Gulf of Fonseca, and to the north by the Gulf of Honduras, a large inlet of the Caribbean Sea. Its capital and largest city is Tegucigalpa.

North-eastern region of Honduras, the focus of the project, is characterized by high poverty levels and food insecurity. It is also highly vulnerable to the effects of climate change, which threatens the livelihoods of small subsistence farmers that comprise the majority of the population.

Honduras has a Human Development Index of 0.625, classifying it as a nation with medium development. When adjusted for income inequality, its Inequality-adjusted Human Development Index is 0.443.

The project is co-financed with the Rome-based International Fund for Agricultural Development (IFAD) and the government of Honduras. It aims to enhance incomes and living conditions for some 70,000 people in rural communities, with a strong emphasis on boosting livelihoods for women and youth, reducing urban migration and strengthening the country’s resilience to climate change.

PROINORTE project will work with up to 90 producer organizations and support them to enhance their organizational and business capacities increasing access to market value chains and optimizing primary production, transformation and commercialization models, according to an official OPEC Fund press release issued on July 22.

The OPEC Fund’s contribution will exclusively finance rural production infrastructure, water management and climate change mitigation activities, including the construction and upgrading of 220 km of roads, water storage and sanitation facilities, irrigation and food crops storage and processing facilities, the press release stressed.

In addition, around 10,500 energy efficient cooking stoves will be installed, and environmental activities implemented, including reforestation of about 1,000 hectares. Approximately 2,200 new on- and off-farm jobs will also be created under the project.

OPEC Fund Director-General Dr. Albdulhamid Alkalifa said: “We are pleased to support Honduran rural communities that are affected by the impact of climate change, food insecurity and urban migration. By providing communities with the necessary infrastructure and technical assistance, the project will promote self-sufficiency and sustainability.”

Honduras and the OPEC Fund have been partners in development since 1976. OPEC Fund’s operations to the country have focused on energy, agriculture, transportation, financial (SMEs), water and sanitation sectors, among others.

OPEC Fund is the only globally mandated development institution that provides financing from member countries exclusively to non-member countries. The organization works in cooperation with developing country partners and the international development community to stimulate economic growth and social progress in low- and middle-income countries around the world.

The OPEC Fund was established by the member countries of OPEC in 1976 with a distinct purpose: to drive development, strengthen communities and empower people. “Our work is people-centered, focusing on financing projects that meet essential needs, such as food, energy, infrastructure, employment (particularly relating to MSMEs), clean water and sanitation, healthcare, and education,” says the Fund. “Our vision is a world where sustainable development is a reality for all,” it adds.

To date, the OPEC Fund has committed more than US$22 billion to development projects in over 125 countries with an estimated total project cost of US$187 billion. [IDN-InDepthNews – 23 July 2021]

Image: Tegucigalpa CC BY 2.0

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