Doing Business With OPIC

OPIC’s Mission Statement

“To mobilize and facilitate the participation of the

United States capital and skills in the economic and

social development of less developed countries and

areas, and countries in transition from nonmarket and

market economies, thereby complementing the

development assistance objectives on the United

States…”

OPIC

• Small, independent U.S. government agency established in 1971

• Supports U.S. foreign direct investment in approximately 145 developing countries

OPIC Products

• Finance

• Political Risk Insurance

• Investment Funds

Investor Eligibility

• U.S. citizen• U.S. corporation or other

organization, over 50% U.S. owned• Foreign corporation, over 95% U.S.

owned• Foreign entity other than a

corporation, 100% U.S. owned

General Eligibility Requirements

• Project criteria:

– New projects, expansions, privatizations

– Private investment (limited foreign government participation, private sector management)

General Eligibility Requirement

• Policy criteria– host country – developmental effects– no negative U.S. economic effect– environmentally sound– worker rights, human rights

OPIC Finance

OPIC FinanceWill Provide Senior Debt

for Your Project

Finance Program• Limited recourse project financing, up to:

– 50% of project costs for new projects– 75% of costs of expansions– $100k to $250 million per project

• Loan Terms:– amortization 3-15 years– market rates of interest– share collateral with other senior lenders

• Corporate loan

Finance Program Criteria

• Commercial viability• Track record / experience of sponsors• Reasonable leverage• Project completion support• Minimum 25% beneficial U.S. ownership• Balance sheet lending for corporate loan

Sample Total Project Costs

Pre-operating expenses $ 2,000,000

Land 1,000,000

Construction 2,500,000

Equipment 4,000,000

Working capital 1,000,000

Total project costs $ 10,000,000

Sample Financial Sources EquityU.S. Sponsor $ 1,250,000 Non-U.S. Sponsor $ 3,750,000

TOTAL $ 5,000,000 50%

DebtOPIC Loan $ 4,000,000Other Debt $ 1,000,000

TOTAL $ 5,000,000 50%

Total CapitalTotal Capital $10,000,000$10,000,000 100%100%

OPIC Insurance

Insurance Program

• Coverages–Currency Inconvertibility–Expropriation–Political Violence

• Assets Coverage• Business Income Coverage

• Up to 20 year term, rates fixed for life of contract

Insurance Summary

• Inconvertibility Coverage– protects income and returns against

blockage

• Expropriation Coverage– protects net book value of insured

investment

• Political Violence Coverage– protects physical assets and replaces

lost income

Expropriation - Compensation

• Scheduled Payment in Default • Acceleration at OPIC’s option • Limitation - commercial default /

realizable value of security

Political Violence

Scope of Coverage• Violent Act with Political Objective

• Direct and immediate cause of default

• Default continues for 30 days

Compensation• Amount of scheduled payment in default

Investment Funds

Created as:1987 Administration Foreign Policy

InitiativeCreated to:

• Complement OPIC’s insurance and loan products

• Address need for private equity in developing countries

• Provide catalyst for private sector development

I - Overview: Goals and Needs

OPIC Private Equity Funds

• OPIC Supports a family of 26 Private Equity funds targeting a variety of regions and sectors

• Fund Managers are selected by a transparent process

• Funds are capitalized by a OPIC guaranteed debt and private equity

OPIC’s Role in Your Investment

OPICInsurance

OPICInsurance

Non-U.S.Banks

Non-U.S.Banks ProjectProject

OPICFinanceOPIC

Finance

LocalSponsorLocal

Sponsor

ProjectCompanyProject

Company

U.S.Banks

U.S.Sponsor

OPIC SupportedInvestment Fund

OPIC SupportedInvestment Fund

Contact OPIC to discuss your project: WWW.OPIC.GOV or call (202) 336-8400