Overseas Private Investment Corporation

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Overseas Private Investment Corporation

• Political Risk Insurance and Financing for
  International Schools
• Association of International Schools in Africa
  (AISA) Conference
• Kampala, Uganda
• October 18-21, 2008

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What is OPIC ?

• U.S. government agency.
• Fosters economic development in new and emerging
  markets.
• Supports U.S. projects overseas.

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What does OPIC do?

• Offers long-term political risk insurance,
  financing, and investment funds to support U.S.
  companies in emerging markets and developing
  countries.

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Political Risk Insurance
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Advantages of OPIC Political Risk Insurance

• Extremely affordable coverage tailored to
  specific needs of international schools
• Policies are non-cancelable by OPIC
• Terms and prices are locked in for up to 20 years
• Coverage can be up to 250 MM No minimum
  coverage
• OPIC advocacy and over 95 of claims paid

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Who is eligible for Political Risk Insurance?

• U.S. citizens.
• U.S. businesses over 50 U.S. owned.
• Foreign corporations at least 95 U.S. owned.
• U.S. 501 (c)(3) nonprofit corporations controlled
  by U.S. citizens.

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Risks Covered

• Political Violence
• protects physical assets of schools (such as
  building, equipment, furniture, supplies,
  vehicles, etc.) against damage caused by
  political violence.
• Expropriation
• protects schools physical assets against
  confiscation, nationalization, and deprivation by
  host government.
• Inconvertibility Coverage
• protects returns and investments against
  inability to convert and/or transfer.

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Need for Political Risk Insurance for Schools

• Increase in political violence against Schools
• This year alone
• Attack on schools in Somalia
• Suicide attack on school in Algeria
• Recent terrorist threats to Makerere University
  in Uganda
• Violence in Kenya schools
• Grenade attacks on schools in Burundi
• And, in recent past
• Bombings at two Swaziland schools in 2006
• Burning of schools in state of Punjab in Pakistan
  in 2005
• Hostage standoff at international school in
  Cambodia in 2005.
• School hostage crisis in Beslan, Russia in 2004.
  

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Political Risk Insurance Coverage For

• Physical Assets
• Costs of Evacuation of Staff and/or students
• Costs of Permanent Abandonment
• At Very Favorable Pricing!

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Physical Assets

• Compensates for financial losses due to damage to
  schools physical assets as a result of political
  violence.
• Compensates for financial losses due to
  confiscation of schools physical assets by the
  host government.
• For political violence, compensation is based on
  cost to repair or replace physical assets
• For expropriation, compensation is based on the
  book value of the physical assets.

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Evacuation

• Compensates for losses due to damage to physical
  assets due to political violence,
• Compensates up to 12 months of continuing normal
  expenses due to damage physical assets damage,
  and
• Compensates for expenses related to evacuation
  and temporary abandonment of school.
• After war ended in Lebanon in 2006, three schools
  quickly opted for OPIC evacuation coverage.

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Permanent Abandonment

• If temporary abandonment of the school becomes
  permanent (e.g., over 12 months), coverage
  protects against losses due to permanent
  abandonment of the project due to political
  violence or threats of political violence.
• Compensates based on book value of project
  assets.

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Low Pricing

• OPIC offers deep discounts to International
  Schools.
• Pricing for International Schools typically
  ranges from 25 40 basis points per coverage
  (2.50 - 4 per 1000 in coverage), depending on
  the location.
• Pricing can be further discounted by deductibles,
  stop losses, etc.

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Finance
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Advantages of OPIC Loans

• Long-term loans
• (10-15 years)
• Reasonable interest rates with interest-only
  Grace Period during construction
• Financing for 50 - 70 of total project
• 100,000 - 250 MM
• OPIC advocacy

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Who is Eligible for OPIC Finance?

• U.S. 501 (c)(3) or a foreign organization with a
  majority U.S. representation or involvement on
  the Board of Directors.
• Commercially viable project
• Track record/experience of sponsors

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OPICs Education Portfolio

• American Cooperative School of Tunis, Tunisia
• American Embassy School of Lusaka, Zambia
• American International School of Abuja, Nigeria
• American International School Systems, Lahore,
  Pakistan
• American University of Beirut, Lebanon
• Colegio Mexico-Americano (Mexico)
• International College (Lebanon)
• International Community School (Ghana)
• Istanbul International Community School, Inc.
  (Turkey)
• Lebanese American University, Beirut, Lebanon
• Tashkent International School, Uzbekistan
• Quality International Schools, Tbilisi, Georgia
• Westwood International School (Botswana)

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Next Steps
The OPIC Insurance Process

• Submit Registration
• Complete Insurance Application (available
  on-line)
• Retainer Fee Agreement
• Project Team Formation
• Obtain Policy Clearances
• Underwriting
• Execution

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Next Steps
The OPIC Direct Loan Process

• Prepare a 1-2 page draft executive summary of the
  project and discuss with OPIC
• Complete and submit the Finance application
  (available on-line) with a business plan and
  audited financial statements and cash flow
  projections
• Submit a Sponsor Disclosure Report
• Project team Formation and underwriting process
• OPIC Finance due diligence (credit and policy
  clearances)
• Loan approval and commitment letter
• Loan Documentation
• Loan Disbursement
• Note The OPIC loan requirements and process are
  described in detail on the OPIC web site
  www.opic.gov. See Finance and Applying.

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OPIC CONTACT INFORMATION
www.opic.gov