The OPEC Fund for International Development has launched its first local currency financing operation with a US$20 million-equivalent loan to Azerbaijan’s Bank Respublika, expanding support for small businesses while reducing foreign exchange exposure for borrowers.
The proceeds of the facility will be on-lent to micro, small and medium-sized enterprises in Azerbaijan, targeting entrepreneurship, job creation and broader private sector growth, the Vienna-based development finance institution said.
OPEC Fund President Abdulhamid Alkhalifa said the transaction marked a milestone in the lender’s efforts to diversify its financing products and better align with the needs of partner countries.
“Local currency financing helps reduce exchange rate risk for borrowers, strengthens investment confidence and supports the development of domestic capital markets,” Alkhalifa said.
The deal was signed with Bank Respublika on the sidelines of the fifth OPEC Fund Development Forum in Vienna in late June.
Chairman of the Management Board Tariyel Ismayilov described the agreement as a sign of confidence from one of the world’s leading development finance institutions and said it could pave the way for a longer-term partnership.
The transaction comes as multilateral lenders increasingly explore local currency lending to shield businesses in emerging markets from exchange rate volatility, which has intensified in recent years due to global inflation pressures and tighter financial conditions.
Bank Respublika, founded in 1992, was Azerbaijan’s fifth-largest bank by assets in 2025 and focuses largely on MSMEs and retail banking clients. The bank operates an expanding branch network across the country.
The loan also reflects the OPEC Fund’s broader push to expand its financing toolkit beyond traditional sovereign and corporate lending. In recent years, the institution has introduced products including syndicated loans, results-based financing and sustainability-linked lending.
The OPEC Fund has worked with Azerbaijan since the early 2000s and has approved more than $250 million in financing across the banking, energy and infrastructure sectors.
