Overseas Private Investment Corporation International Trade Association of Greater Chicago March 16,

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Overseas Private Investment CorporationInternati
onal Trade Association of Greater Chicago March
16, 2005 Chicago, IL

• Extend Your International Reach with OPIC -
• Financing and Insuring Investment in Emerging
  Markets and Transitioning Economies
• Presented by
• John Moran
• Director Investment Development
• Central and Eastern Europe
• Overseas Private Investment Corporation (OPIC)

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OPICs Goals and Objectives

• Support U.S. private investment in more than 150
  emerging markets and transitioning economies
  throughout the world
• Assist in the economic growth by facilitating
  private investment in projects sponsored by
  private enterprises
• Operate on a self-sustaining basis by supporting
  commercial viable projects on commercial terms
• Do not compete with the private sector

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OPIC Priority Regions and Sectors

• Mexico
• Middle East and North Africa, including
  Afghanistan and Iraq
• Sub-Saharan Africa
• Small Business
• Housing
• Tsunami-affected reconstruction

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Recent OPIC Supported Projects

• Bechtel/Croatia Motorways Croatia
• Hamma Water Desalination - Algeria
• WapCo Gas Pipeline - West Africa
• Investment Funds for Mexico and Latin America
• Natural Gas Pipelines in Egypt and Israel
• Hydropower Facility in Kosovo

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Basic OPIC Programs

• Facilitate U.S. investment and participation in
  projects by providing
• Political Risk Insurance
• Project Finance
• Investment Funds

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Eligibility forOPICPrograms

• Investor
• Project
• Investment
• Country

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ProjectEligibility

• New projects, expansions, acquisitions and/or
  privatizations
• Electric power facilities (finance and/or insure
  new facilities insure renovations)
• Oil and gas field development (Can insure, but
  not finance exploration activities),and oil and
  gas pipelines
• Infrastructure, including roads, ports, railways,
  and other private-sector controlled infrastructure

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ProjectRequirements

• Economically sound, commercially viable, private
  sector project
• Positive development effect
• No negative effect on U.S. economy
• Limited government participation (or at least
  private sector management control)
• Environmentally sound
• Internationally recognized worker rights enforced

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Countryand Regional Focus

• Active in Iraq, Afghanistan, Mexico, Central and
  Eastern Europe, and Eurasia
• OPICs only overseas offices is in Moscow
• OPIC has sponsored country and regional
  investment conferences in
• Andean region (Lima, 2001)
• Serbia (Belgrade, 2003)
• Emerging Europe (Bucharest, 2004)

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Investment Insurance Protecting U.S.
Investors from Real or Perceived Political Risks

• Currency Inconvertibility
• Expropriation
• Political Violence, including Terrorism coverage

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ExpropriationCoverage

• Expropriation, nationalization or confiscation
• Creeping expropriation

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KeyFeaturesofOPIC Insurance

• Policy terms up to 20 years
• Premium rates are locked in
• May be canceled by insured,but not by OPIC
• Up to 250 million in coverage available per
  project no lower limit
• Important protection for small and medium sized
  businesses
• Can help attract additional financing and
  business support

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Benefitsof OPIC Insurance

• Discourages arbitrary actions by host government
• OPIC can play an advocacy role
• Provides comfort to banks, suppliers and
  shareholders
• OPIC reserves exceed 4 billion
• Full faith and credit of the United States

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Investment Finance Lender of Last Resort for
U.S. Investors When Private Sector Financing Is
Not Available

• Characteristics of OPIC finance
• Limited recourse, long-term finance for private
  sector, commercial projects
• Loan amounts up to 250 million
• Variety of financial structures which require
  only 25 U.S. equity in project to qualify for
  OPIC support
• Can co-finance with IFC, Regional Multilateral
  Banks (ADB, AfDB, IADB, EBRD), commercial banks
  and ECAs like EXIM

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Investment Finance

• Important considerations
• Projects must be controlled by private sector
• Sound financial plan
• Cash flow adequate to service debt
• Partners must have strong track record in same or
  similar industry
• Significant collateral and the ability to provide
  adequate project completion support

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Structure of OPIC Finance Support
OPIC Insurance
OPIC Loan
U.S. Sponsor
U.S. Banks
Project Company
Local Financing
Project
Local Sponsor
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OPIC Small Business Center --Overview

• Important Factors
• 60 days from complete application to approval
• U.S. business sponsor lt 35 million in annual
  consolidated revenues or 27 million in personal
  net worth
• Loan amounts from 100k to 10m (viable business
  plan and successful track record)
• Insurance coverage up to 15m
• Must adhere to all investment policies

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Investment Funds Access to equity for the
best local companies

• Innovative Use of OPIC Support
• OPIC does not take direct equity in projects
• Fund managers make investment decisions
• Can work in conjunction with OPIC insurance and
  finance
• 36 OPIC Funds (incl. Approvals)
• Nearly 3.0 billion in commitments
• Invested in 53 Countries and 385 Portfolio
  Companies

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Conclusion

• Strong track record in mobilizing new investment
  capital -- FDI and domestic
• Very active in support of private investment in
  post-conflict reconstruction economies
• Focus on Small Business
• Support for Public-Private Partnerships to
  finance infrastructure, (e.g., water, waste
  management, transport/roads)

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ForMoreInformation

• Overseas Private Investment Corporation
• 1100 New York Avenue, N.W.
• Washington, D.C. 20527-0001 USA
• Tel. (OPIC/USA)1 202 336-8674
• Fax [phone]
• E-Mail jmoran_at_opic.gov
• Internet www.opic.gov