Doing Business With OPIC

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• Doing Business With OPIC

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OPICs 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
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OPIC

• Small, independent U.S. government agency
  established in 1971
• Supports U.S. foreign direct investment in
  approximately 145 developing countries

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OPIC Products

• Finance
• Political Risk Insurance
• Investment Funds

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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

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General Eligibility Requirements

• Project criteria
• New projects, expansions, privatizations
• Private investment (limited foreign government
  participation, private sector management)

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General Eligibility Requirement

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

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OPIC Finance
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OPIC FinanceWill Provide Senior Debtfor Your
Project
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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

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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

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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

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Sample Financial Sources
Equity U.S. Sponsor 1,250,000
Non-U.S. Sponsor 3,750,000 TOTAL
5,000,000 50 Debt OPIC Loan
4,000,000 Other Debt
1,000,000 TOTAL 5,000,000 50 Total
Capital 10,000,000 100
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OPIC Insurance
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Insurance Program

• Coverages
• Currency Inconvertibility
• Expropriation
• Political Violence
• Assets Coverage
• Business Income Coverage
• Up to 20 year term, rates fixed for life of
  contract

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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

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Expropriation - Compensation

• Scheduled Payment in Default
• Acceleration at OPICs option
• Limitation - commercial default / realizable
  value of security

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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

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Investment Funds
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Created as1987 Administration Foreign Policy
Initiative
I - Overview Goals and Needs

• Created to
• Complement OPICs insurance and loan products
• Address need for private equity in developing
  countries
• Provide catalyst for private sector development

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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

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OPICs Role in Your Investment
OPIC Insurance
OPIC Finance
U.S. Banks
U.S. Sponsor
OPIC Supported Investment Fund
Project Company
Non-U.S. Banks
Project
Local Sponsor
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Contact OPIC to discuss your project
WWW.OPIC.GOV or call [phone]