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Extend Your International Reach with OPIC - Financing and Insuring Investment in Emerging ... Support U.S. private investment in more than 150 emerging markets and ...

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Overseas Private Investment CorporationInternational Trade Association of Greater Chicago March 16, 2005 Chicago, IL

Extend Your International Reach with OPIC -

Financing and Insuring Investment in Emerging Markets and Transitioning Economies

Presented by:

John Moran

Director – Investment Development

Central and Eastern Europe

Overseas Private Investment Corporation (OPIC)

opic s goals and objectives
OPIC’s Goals and Objectives
  • Support U.S. private investment in more than 150 emerging markets and transitioning economies throughout the world
  • Assist in the economic growth by facilitating private investment in projects sponsored by private enterprises
  • Operate on a self-sustaining basis by supporting commercial viable projects on commercial terms
  • Do not compete with the private sector
opic priority regions and sectors
OPIC Priority Regions and Sectors
  • Mexico
  • Middle East and North Africa, including Afghanistan and Iraq
  • Sub-Saharan Africa
  • Small Business
  • Housing
  • Tsunami-affected reconstruction
recent opic supported projects
Recent OPIC Supported Projects
  • Bechtel/Croatia Motorways – Croatia
  • Hamma Water Desalination - Algeria
  • WapCo Gas Pipeline - West Africa
  • Investment Funds for Mexico and Latin America
  • Natural Gas Pipelines in Egypt and Israel
  • Hydropower Facility in Kosovo
basic opic programs
Basic OPIC Programs

Facilitate U.S. investment and participation in projects by providing:

  • Political Risk Insurance
  • Project Finance
  • Investment Funds
eligibility for opic programs
Eligibility forOPICPrograms
  • Investor
  • Project
  • Investment
  • Country
project eligibility
  • New projects, expansions, acquisitions and/or privatizations
  • Electric power facilities (finance and/or insure new facilities; insure renovations)
  • Oil and gas field development (Can insure, but not finance exploration activities),and oil and gas pipelines
  • Infrastructure, including roads, ports, railways, and other private-sector controlled infrastructure
project requirements
  • Economically sound, commercially viable, private sector project
  • Positive development effect
  • No negative effect on U.S. economy
  • Limited government participation (or at least private sector management control)
  • Environmentally sound
  • Internationally recognized worker rights enforced
country and regional focus
Countryand Regional Focus
  • Active in Iraq, Afghanistan, Mexico, Central and Eastern Europe, and Eurasia
  • OPIC’s only overseas offices is in Moscow
  • OPIC has sponsored country and regional investment conferences in:
    • Andean region (Lima, 2001)
    • Serbia (Belgrade, 2003)
    • Emerging Europe (Bucharest, 2004)
investment insurance protecting u s investors from real or perceived political risks
Investment Insurance: Protecting U.S. Investors from Real or Perceived Political Risks
  • Currency Inconvertibility
  • Expropriation
  • Political Violence, including Terrorism coverage
expropriation coverage
  • Expropriation, nationalization or confiscation
  • “Creeping” expropriation
key features of opic insurance
KeyFeaturesofOPIC Insurance
  • Policy terms up to 20 years
  • Premium rates are locked in
  • May be canceled by insured,but not by OPIC
  • Up to $250 million in coverage available per project; no lower limit
  • Important protection for small and medium sized businesses
  • Can help attract additional financing and business support
benefits of opic insurance
Benefitsof OPIC Insurance
  • Discourages arbitrary actions by host government
  • OPIC can play an advocacy role
  • Provides comfort to banks, suppliers and shareholders
  • OPIC reserves exceed $4 billion
  • Full faith and credit of the United States
Investment Finance: Lender of Last Resort for U.S. Investors When Private Sector Financing Is Not Available

Characteristics of OPIC finance:

  • Limited recourse, long-term finance for private sector, commercial projects
  • Loan amounts up to $250 million
  • Variety of financial structures which require only 25% U.S. equity in project to qualify for OPIC support
  • Can co-finance with IFC, Regional Multilateral Banks (ADB, AfDB, IADB, EBRD), commercial banks and ECAs like EXIM
investment finance
Investment Finance

Important considerations:

  • Projects must be controlled by private sector
  • Sound financial plan
  • Cash flow adequate to service debt
  • Partners must have strong track record in same or similar industry
  • Significant collateral and the ability to provide adequate project completion support
structure of opic finance support
Structure of OPIC Finance Support















opic small business center overview
OPIC Small Business Center --Overview

Important Factors:

  • 60 daysfrom complete application to approval
  • U.S. business sponsor < $35 million in annual consolidated revenues or $27 million in personal net worth
  • Loan amounts from $100k to $10m (viable business plan and successful track record)
  • Insurance coverage up to $15m
  • Must adhere to all investment policies
investment funds access to equity for the best local companies
Investment Funds: Access to equity for the best local companies

Innovative Use of OPIC Support

  • OPIC does not take direct equity in projects
  • Fund managers make investment decisions
  • Can work in conjunction with OPIC insurance and finance
  • 36 OPIC Funds (incl. Approvals)
  • Nearly $3.0 billion in commitments
  • Invested in 53 Countries and 385 Portfolio Companies
  • Strong track record in mobilizing new investment capital -- FDI and domestic
  • Very active in support of private investment in post-conflict reconstruction economies
  • Focus on Small Business
  • Support for Public-Private Partnerships to finance infrastructure, (e.g., water, waste management, transport/roads)
for more information

Overseas Private Investment Corporation

1100 New York Avenue, N.W.

Washington, D.C. 20527-0001 USA

Tel. (OPIC/USA)+1 202 336-8674

Fax +1-202-408-5155