Overseas Private Investment Corporation

1
Overseas Private Investment Corporation

• Kenneth Angell
• Senior Manager, Project Finance

2
OPIC...

• Is a wholly owned U.S. government corporation
• Operates like a private-sector business with a
  bottom line

3
Where OPIC Currently Operates...

• OPIC facilitates U.S. direct investment in
  business opportunities in more than 150
  developing countries and emerging markets around
  the world.

4
Three Principal Activities

• Financing Loans and Loan Guaranty
• Political Risk Insurance/Reinsurance
• Investment Funds

5
OPICFinance Program
6
OPIC Finance Products

• Direct Loans
• Loan Guaranties

7

• Direct Loan Program
• Reserved for projects that significantly involve
  small businesses and cooperatives
• Generally range from 100k to 30 million

8

• Investment Guaranty Program
• OPICs guaranteed loans range in size from 10
  million to 200 million
• OPIC does all the credit underwriting even though
  it is the guarantor
• Guaranteed loans typically used for larger
  projects
• Often share risk with financial intermediaries
  U.S. lenders

9
Finance Program Criteria

• Investor eligibility
• Track record experience
• Significant U.S. ownership (generally minimum of
  25)
• Limited Government participation (lt 50)
• Project eligibility
• Country where OPIC operates
• Commercially financially viable
• Sound mix of equity and debt

10
Finance Program Criteria

• Policy requirements
• Positive development effects
• Environmentally sound
• Worker rights
• No negative U.S. effects

11
Finance Terms and Conditions

• Amount of OPIC Participation
• 100,000 to 250 million per project
• New Projects 50 of total project costs
• Expansions up to 75 of total project costs
• Leverage
• Generally not exceed 60 debt to 40 equity
• Loan Term
• Amortization of up to 15 years
• Flexible grace period on principal payments

12
OPIC will only finance projects that

• Are commercially sound, private sector projects
• Have significant U.S. ownership, usually at least
  25 percent
• Generate cash flow to repay the loan
• Have collateral

13
OPIC Finance in a Project Finance Transaction
14
Sample Total Project Costs

• Pre-operating expenses 500,000
• Land 1,000,000
• Construction 2,500,000
• Equipment 5,000,000
• Working capital 1,000,000
• Total project costs 10,000,000

15
Sample Financial Sources

• Equity
• U.S. Sponsor 1,000,000
• Non-U.S. Sponsor 3,000,000
• TOTAL 4,000,000 40

• Debt
• OPIC Loan 5,000,000
• Other Debt 1,000,000
• TOTAL 6,000,000 60

Total Capital 10,000,000 100
16
OPIC Political Risk Insurance Covers U.S.
Investments Against

• Inconvertibility The inability to convert and
  transfer local currency into U.S. dollars
  available for capital markets issuances
• Expropriation
• Losses due to expropriation, nationalization or
  confiscation by a foreign government also offer
  arbitral award default and denial of justice
  coverages
• Political Violence Losses due to war,
  revolution, insurrection or politically motivated
  civil strife including terrorism

17
OPIC political risk insurance does not insure

• Commercial risk
• Currency devaluation

18
OPIC Investment Funds

• Privately owned and managed
• These funds can provide equity capital
• Make their own commercially based investment
  decisions while fulfilling OPICs policy mandates
• The funds investments must meet OPIC's U.S. and
  host country economic impact, environment and
  worker rights policy standards

19
OPICs Role in An Investment
OPIC Insurance
OPIC Finance
U.S. Banks
U.S. Sponsor
OPIC Funds
Project Company
Non-U.S. Banks
Project
Local Sponsor
20
OPIC Finance in Georgia
21

• 6 projects in Georgia approved since September
  2008
• Currently 11 active finance projects with 4
  projects in the pipeline
• Currently 2 active insurance projects
• Project Sectors
• Tourism
• Financial Services
• Manufacturing
• Housing
• Services

22
Summary

• OPIC assists U.S. businesses in investing
  overseas.
• OPIC offers finance, political risk insurance,
  and investment funds.
• Complements private sector.

23
Overseas Private Investment Corporation

• Kenneth Angell
• Senior Manager, Project Finance