Overseas Private Investment Corporation
OPIC Overview Presentation
ESKOM CSP & SOLAR AUGMENTATION CONFERENCE
August 26, 2013
John F. Moran, VP – Insurance, OPIC
Our Organization
As the U.S. Government’s development finance institution, OPIC mobilizes U. S.
private capital to help solve critical development challenges and in doing so,
advances U.S. foreign policy.
Shading denotes
OPIC-eligible countries
OPIC currently manages a $16.4B portfolio of projects in 103 countries and operates
on a self-sustaining basis at no net cost to the American taxpayer.
The U.S. Government’s Development Finance Institution
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Administration Development Priorities
OPIC is uniquely positioned to support the administration’s new development strategy.
OPIC’s Unique Position
Foreign
Policy
Development
OPIC
Administration Priorities
“We’re changing how we define development…we
need to harness all the tools at our disposal—from
our diplomacy to our trade and investment policies.”
~President Obama, 9/22/10
• Support broad-based, sustainable economic
growth
• Proactively target specific countries, regions,
sectors, and technologies
US
Business
• Mobilize private sector investment
• Elevate development as a central pillar of
national security policy
The U.S. Government’s Development Finance Institution
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Our Solutions
OPIC offers innovative financial solutions to support private investors including debt financing,
insurance, and support for private equity investment funds.
Current Portfolio*
Products
OPIC operates under a $29B Statutory Capacity



Investment Finance
― Limited recourse, long-term finance for private sector,
commercial projects
― Loan amounts up to $250M per project
― Specific programs for providing finance to small-andmedium-sized enterprises
Political Risk Insurance
― Protection against currency inconvertibility, expropriation
and political violence, including terrorism
― Policy coverage up to $250M per project, up to 20 year
term
― Fixed premium, cancellable only by insured
Investment Funds
― Senior debt for private equity funds selected by
competitive process
― Investment decisions made independently by selected
fund managers
― Provide up to $250M with bullet repayment, zero coupon
structure
$18
$16.4 Billion
$16
$3.1
Insurance
$2.6
Investment
Funds
$10.7
Investment
Finance
$14
$12
$10
$8
$6
$4
$2
$-
Total Exposure
*As of September 30, 2012
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Our Clients and Alliances
OPIC coordinates with other U.S. government agencies and international partners to provide
financing and risk mitigation products to a wide range of clients.
Strategic Alliances
Current Clients
•
Multinationals and Small/Medium Businesses
U.S.
Government
•
•
•
Nonprofits and Impact Investors
Development
Finance
Institutions
•
•
•
•
Other
Partners
The U.S. Government’s Development Finance Institution
•
•
•
Departments of State,
Commerce, and Treasury
USAID & USTDA
Ex-Im Bank and SBA
Millennium Challenge
IFC and MIGA
Regional Development Banks
(IDB, ADB, AfDB, EBRD)
Other Bilaterals (CDC, FMO,
DEG)
Chambers of Commerce
AmChams
NGOs
Financial Institutions
5
Our Policy Standards
Investors and project proposals must satisfy certain policy criteria
to receive OPIC financing and insurance.
Policy Standards for Projects
Eligibility Criteria for Investors
To be eligible for OPIC financing and insurance,
applicants must:
OPIC supported projects must:

Contribute to sustainable development goals

Be located in one of our ~160 eligible
countries

Comply with international environmental
standards

Support international human rights and
worker rights regulations

Cause no loss of U.S. jobs or adverse impact
on the U.S. economy
 Have a commercially viable business plan and
successful track record
 Involve the U.S. private sector in a meaningful
way in the project seeking OPIC support
 Maintain private sector control (<50%
government ownership)
The U.S. Government’s Development Finance Institution
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U.S. Connections in OPIC-Supported Projects
OPIC policy requires that finance and direct insurance projects have a meaningful connection
to the U.S. private sector.
How Does OPIC Define U.S.?
• A U.S.-organized entity generally must be at least 25% U.S.-owned.
• A foreign organized entity generally must be at least majority U.S.-owned.
How Does OPIC Measure U.S. Involvement?
• OPIC requires U.S. involvement in the project company in an amount that is equivalent to 25% of the project
company’s equity, which may be met with equity, long-term debt or other U.S. contracts or, by combining
these types of involvement.
• OPIC will support investment funds if the fund has raised U.S. equity equal to 25% of OPIC’s loan support or
if the fund is managed by a U.S. manager.
How Does OPIC Measure the Duration of U.S. Involvement?
• For an ongoing project, U.S. entities need to retain a 25% interest in the project through final disbursement
of the OPIC loan. In the case of a start-up or ‘greenfield’ project, the U.S. entities need to retain a 25%
interest through physical completion of the project.
• OPIC must approve any proposed transferee of the interest.
How Does OPIC Define U.S. Small Business?
• For OPIC to finance a project with a direct loan, the US involvement must come from US small business. A
“small” business includes: a business with annual revenues during the last fiscal year of less than $400M;
entities/individuals without revenues, net worth of less than $100M.
• Consistent with the U.S. Small Business Administration, OPIC also considers a business with 500 or fewer
employees as “small.”
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OPIC: Investment Finance
OPIC provides a range of flexible, responsive finance to investments in
developing markets
•
Characteristics of OPIC finance:
 Limited recourse, long-term finance for private sector, commercial projects
 Fixed rate terms for up to 20 years
 Loan amounts up to $250 million
 Flexible project structures that generally require only 25% U.S. equity
•
Can co-finance with IFC, Regional Multilateral Banks (ADB, AfDB, IADB, EBRD), other
DFIs, ECAs (EXIM), and private financial institutions
The U.S. Government’s Development Finance Institution
OPIC’s Products: Investment Insurance
OPIC has provided a range of Political Risk Insurance since 1971
 Since 1971 through FY 2012, OPIC has issued insurance for 3,271
projects, at a total coverage amount of $43.9 billion






In that time, OPIC has made 286 insurance claim settlements, totaling $969.6
million
OPIC’s total recoveries are $892.1 million, or 92% of total claim settlements.
Currency Inconvertibility
Expropriation
Political Violence, including Terrorism coverage
Policy terms:
o up to 20 years
o Premium rates are locked in
o May be canceled by insured,
but not by OPIC
o Up to $250 million in coverage available per project; no lower limit
The U.S. Government’s Development Finance Institution
OPIC’s Products: Investment Funds
OPIC’s Investment Funds represent an innovative use of OPIC support
• OPIC may not take equity in projects but provides “equity-like” senior
debt
• Managed by private Fund managers selected by OPIC in “Calls”
• Fund managers selected make investment decisions without OPIC
approval
• Do not require US investor in project
• OPIC policy criteria apply
The U.S. Government’s Development Finance Institution
Structure of OPIC Support
OPIC
Insurance
OPIC Loan
U.S.
Banks
U.S.
Sponsor
OPIC Fund
Project
Company
Local
Financing
Project
Local
Sponsor
Our Impact
Over the past 41 years OPIC has supported over $200 billion of investment in developing
markets that is projected to support over 277,000 U.S. jobs.
Success Stories
OPIC By the Numbers*
Total Investment
Supported
Total Projects
Financed
$50
$100
$150

India: $750,000 in financing for
Husk Power for small generators
that provide clean power to rural
Indians from discarded rice husks.

Iraq: $26M in financing to
Claremont Erbil for affordable
housing hundreds of families in
need.

Ghana: $180M in political risk
insurance to Belstar for a project
that will increase clean water access
and make the country’s water
treatment plants more efficient.
$200
4,000
0
1,000 2,000 3,000 4,000 5,000
$75 billion
$0
U.S. Jobs
Supported
(Projected)
$50
$100
277,000
0
*Since 1971
Haiti: $6 million loan to Haiti 360 to
produce high-quality concrete to
rebuild homes and other
infrastructure destroyed in the 2010
earthquake.
$200 billion
$0
U.S. Exports
Supported
(Projected)

200,000
400,000
^ [photo: Soma Vatsa/for NPR]
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OPIC’s Strategic Priorities
OPIC: Financing solutions for sustainable prosperity
Renewable Resources
•
OPIC has a strong track record of
supporting renewable energy and
clean technology projects in
emerging markets
•
Renewable resources includes not
just energy, but projects that foster
more efficient use of existing
resources across the board – such as
water, fuel, fiber and food
•
From food security to agriculture and
water, OPIC seeks to expand its reach
to support innovate technologies to
increase efficiency, increase sources
and ensure access
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OPIC support for USG Global Climate Change commitments
OPIC committed nearly $1.6B in financing to renewable resources projects in emerging markets
during FY2012, an increase of almost half a billion dollars over the previous year.
• OPIC is helping bring cleaner, sustainable energy to
developing countries around the world, with
renewable resource commitments covering a broad
range of sectors & geographic regions.
• OPIC’S renewable resources commitments have
grown from under $10M in 2008 to nearly $1.6B in
2012 - representing more than one-third of OPIC’s
total 2012 portfolio.
• Focus on supporting projects in every sector – wind,
solar, hydro, geothermal, biomass, energy efficiency
and clean tech.
• OPIC has made robust contributions to USG Fast Start
Financing commitments with a $1 billion in FY11
commitments and an additional $721 million in FSF
eligible commitments in 2012.
OPIC is the USG’s most efficient tool in leveraging climate change financing in order to meet its
commitment to help developing countries combat climate change
The U.S. Government’s Development Finance Institution
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OPIC Support for Economic Opportunities in Strategic
Priority Countries: Sub-Saharan Africa
OPIC has significantly expanded its portfolio in Sub-Saharan Africa under the Obama Administration.
Since 2009, OPIC’s portfolio has grown by 48%, increasing from $2.5B in 2009 to $3.74B in 2012.
OPIC Portfolio in Sub-Saharan Africa:
OPIC’s portfolio in Sub-Saharan Africa currently totals $3.74 billion across 112 projects, including:
.
West Africa – Over $1.839 billion for projects in
OPIC Commitments in Sub-Saharan Africa
West African countries, including:
(in millions of USD)
• Energy Efficiency (Nigeria) – $37.8M in
1200
insurance to support the construction of three
Combined Heat and Power generation plants
963.3
1000
907
for the Nigeria Bottling Company, an affiliate of
a Coca-Cola distribution company. These
743.5
800
projects will promote energy efficiency,
lowering carbon emissions, while supporting
600
local economic development.
339.2
400
• Health Care (Ghana) – $246M in insurance to
Belstar to support the provision of medical
126 164.6
200 110
equipment and personnel training at up to 100
hospitals. By increasing the availability of
0
mobile specialized clinics in all 10
administrative regions, the project will also
benefit low- and middle-income Ghanaian
residents. The project is expected to generate
approximately $147M in US exports.
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OPIC Support for Economic Opportunities in Strategic
Priority Countries: Sub-Saharan Africa
While Sub-Saharan
Africa comprised only 4% of OPIC's global portfolio of loans, guarantees and
.
insurance in 2001, today it represents a full 23% of OPIC's total portfolio.
Central Africa – Over $85 million for projects in Central African countries, including:
• Manufacturing (Congo and the DRC) – $45M in insurance for Seaboard Corporation to construct and expand flour
mills in both Congo and the Democratic Republic of Congo. The project also includes work on animal feed facilities
in Congo and a cargo handling facility in the DRC. The facilities are increasing the countries’ food producing
capacities and domestic food security. The cargo handling facility is an important contribution to the infrastructure
that will be important for the DRC’s economic growth.
• Water and Sanitation (Cameroon) – $800,000 in financing for a water bottling facility in Cameroon. The project will
allow for the transfer of management and industrial skills while producing much needed safe drinking water. The
project is expected be a boon to public health, human capital, employment, and economic growth.
East Africa – Over $449M for projects in East African countries, including:
• Microfinance (Tanzania) – $12M in financing for BRAC-owned microfinance institutions in Tanzania. By providing
capital to those who would otherwise be unable to obtain credit from mainstream banks, these MFIs are an engine
for income generation in Tanzania.
• Agriculture (Rwanda) – $7M in insurance to support the expansion of tea processing facilities at the Sorwathe
factory in Rwanda. Tea Importers, the U.S. company that owns Sorwathe, currently purchases tea leaves from about
5,000 small landholders, making the factory a critical source of employment and income in Rwanda.
• Renewable Energy (Kenya) – Up to $310M for a project that will double the generating capacity of a geothermal
plant in Kenya, adding 52 MW to the existing 48 MW of capacity. The expansion will incorporate environmentallyfriendly American technology, and create jobs in America and Kenya.
Southern Africa – Over $418M for projects in Southern African countries, including:
• Services (Botswana) – $219,000 in insurance to a firm providing development consulting services in Botswana.
*Data current as of September 30, 2012.
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Conclusion
OPIC can be a unique partner to the U.S. business sector, private investors and other
institutions
•
•
•
•
Catalyzing investment flows to developing countries
Outstanding record mobilizing investment capital -- FDI and domestic – and
supporting USG foreign and development policy
Enhanced cooperation with other Development Finance Institutions, USG
agencies, and local officials and private sector to assist OPIC in identifying
opportunities and addressing challenges
Improve information flow and strengthen OPIC’s impact with host country,
international community and private sector
The U.S. Government’s Development Finance Institution
Next Steps
OPIC is actively looking for new initiatives, partners and transactions
For additional information please contact OPIC:
• Website: www.opic.gov
• Direct Contact for Information:
 email: Info@opic.gov
 OPIC Main Phone: 202-336-8400
•
Direct Contact for Insurance
 email: John.Moran@opic.gov
 Phone: 202-336-8674
•
Direct Contact for Investment Development
 email: Alison.Gatchev@opic.gov
 Phone: 202-336-8651
The U.S. Government’s Development Finance Institution