NAFTA and Investment Opportunities

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An Overview of OPIC
The Overseas Private Investment Corporation
2004
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What Does OPIC Do?

• Self-sustaining government agency that enables
  U.S. businesses to succeed in emerging markets
• Supports private sector growth in developing
  countries
• Provides long term financing for U.S. businesses
  in emerging markets
• Most experienced provider of political risk
  insurance in the world
• Brings equity capital to developing countries by
  supporting private equity investment funds

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Why Do Businesses Use OPIC?

• OPIC Finance
• OPIC Political Risk Insurance
• OPIC Investment Funds

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OPIC Priorities

• Regions Frontline States, Russia and the CIS,
  Mexico and Sub-Saharan Africa

• Sectors Housing, Infrastructure, Technology

• Small Business

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OPIC EXPOSURE IN SUB SAHARAN AFRICA
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Maximizing the Opportunities
OPIC Finance
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OPIC Finance - Benefits
Flexible Programs (new Small Business Center)
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OPIC Finance Eligibility

• Eligibility
• Commercially viable business plan and successful
  track record
• At least 25 U.S. equity ownership
• Limited government participation (lt50)

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OPIC Finance Terms

• Terms
• Loan term
• Amortization of up to 15 years
• Amount of OPIC participation
• 100k to 250 million per project
• Up to 50 of total project costs for new projects
• Up to 75 of total project costs for expansions
• Leverage
• 60 debt to 40 equity
• Pricing
• Market rates of interest (fixed)
• Limited recourse financing
• Project completion support

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Terms and leverage vary
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OPIC Direct Loan Example
CASH, LAND, MANAGEMENT AND LOCAL SUPPORT
LOCAL PARTNER 75
PROJECT COMPANY
CASH, TECHNOLOGY, MANAGEMENT FINANCING
U.S. PARTNER 25
OPIC loan 50-70 tpc
Supporting U.S. Trinidad and Tobago Joint
Ventures
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Elements of a Successful Project 5 Es
Total Project Costs 10 million
40 EQUITY 4 mill.
60 Debt 6 million
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ownership by an ELIGIBLE U.S. investor
OPIC will consider financing 60 of the project
if the project is ENVIRONMENTALLY sound No
negative U.S. EFFECTS ETHICAL business practices
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Supporting U.S. Trinidad and Tobago Joint
Ventures
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OPIC Finance Process
Profits!
Disbursement Monitoring
Credit Policy Approval
Due Diligence
Screening
Application
Disbursement
Pre-Screening
Screening
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Minimizing the Risks
OPIC Political Risk Insurance
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OPIC Insurance - Benefits
Protects Your Investment
Eliminates Risk of Unfair Interference
Flexible Programs (new Small Business Center)
Facilitates Access to Credit
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OPIC Insurance Eligibility

Eligibility

• U.S. citizens
• Corporations, partnerships or other associations
  created under laws of the U.S., over 50 U.S.
  owned
• Foreign corporations at least 95 owned by U.S.
  citizens, corporations, or partnerships
• Other foreign entities 100 U.S. owned

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OPIC InsuranceTerms

• Terms
• Policy terms up to 20 years. Rates locked in.
• May be canceled by insured, but not by OPIC
• Maximum 250 million coverage per project (no
  minimum requirements)
• 10 self-insurance requirement (except for
  third-party lenders or lessors)

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OPIC InsuranceCoverage

• Coverage
• Inconvertibility earnings, return of capital,
  principal and interest payments, technical
  assistance fees, and similar remittances on
  insured investments
• Expropriation
• equity - book value of investment at time of
  expropriation
• loans - based on outstanding principal and
  accrued interest
• Political violence replacement cost of assets
  and income (up to 1yr) of destroyed assets

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Overview New OPIC Small Business Center

Reduced Response Time 60 days from complete
application to loan agreement or insurance
contract

• Eligibility
• U.S. business sponsor with less than 35 million
  in annual consolidated revenues or 27 million in
  personal net worth
• Loan amounts ranging in size from 100k up to
  10m (commercially viable business plan and
  successful track record)
• Insurance coverage up to 15m no minimum
  investment size
• Projects must adhere to all OPIC investment
  policies

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Overview New OPIC Small Business Insurance Wrap

• Low-cost insurance coverage for small business
  loan clients.
• All three forms of political risk coverage for
  their equity investment.
• -Political Violence, Expropriation and
  Inconvertibility
• One-stop shopping at OPIC.
• -Client can receive finance and insurance
• Stream-lined approval and credit review process.
• -Client completes only the SBC loan application

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Overview New OPIC Terrorism Insurance

• Stand-alone coverage protecting against acts of
  terrorism.
• Includes weapons of mass destruction.
• Longer tenor (up to 10 years) to protect U.S.
  investment abroad.
• Lower price than our full political violence
  coverage.

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For more information, insurance and finance
applications and contact information, visit our
website http//www.OPIC.gov
To discuss your project, please contact OPICs
Investment Development and Economic Growth
Department [phone]