Updated April 1998
The Overseas Private Investment Corporation (OPIC) is an independent, self-sustaining U.S.
Government agency that encourages private sector U.S. investment overseas by providing
investment finance and insurance to American businesses large and small making long-term
investments.
OPIC services are available in some 140 developing nations and emerging markets worldwide,
including all of the countries of the New Independent States. OPIC has provided more than $3.5
billion in combined project financing and political risk insurance to American companies
sponsoring projects in Armenia, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Ukraine,
and Uzbekistan.
OPIC Programs
Project Financing
OPIC offers direct loans and loan guarantees that help American companies open new businesses
or expand existing ones overseas. OPIC's long-term, limited-recourse project financing is
available to ventures involving significant equity participation by U.S. businesses. Loan guarantees
range in size from $10 million to $200 million and are typically used for larger projects, while
direct loans are reserved for small businesses and cooperatives and generally range from $2
million to $30 million. Loan packages are individually structured for each project, and OPIC looks
for repayment from the revenues generated by the project itself.
Political Risk Insurance
OPIC protects U.S. investors against political risks overseas by offering insurance for American investments that covers companies against expropriation, political violence, and currency inconvertibility. OPIC's policies are available with terms up to twenty years and for amounts up to $200 million per project. OPIC has special programs for infrastructure development, financial institutions, leasing, natural resources, and oil and gas projects. For the coverage, companies pay market-based fees and premiums.
Investment Funds
OPIC provides loan guarantees to support privately owned and managed investment funds that make equity investments in new, expanding, or privatizing enterprises around the world. OPIC funds are currently operating in nearly every region of the world, including six concentrating their investments in the NIS. The investment funds are privately owned, privately managed, and make their own commercially- based investment decisions. Sponsors seeking long-term growth capital for their projects should approach the appropriate fund directly. Contact the OPIC Information Officer at (202) 336-8799 for a list of these funds.
General OPIC Requirements
* OPIC-financed projects must demonstrate a potential for positive effects on the U.S. economy. Assistance will be denied to projects that are likely to have a negative effect on U.S. employment or trade. U.S. procurement, net financial flows, and net project exports to the United States are considered.
* OPIC does not participate in projects subject to performance requirements that would substantially reduce the potential U.S. trade benefits of the investment. Of particular concern are "trade-related" performance requirements of host governments to ensure local content and minimum export levels.
* OPIC has a statutory mandate to support projects that are responsive to host country development needs, and which foster private initiative and competition. The contribution of the proposed project to the host country's economic and social development is closely examined. Monopoly rights or concessions (over five years) will require special justification.
* OPIC is required by statute to decline to support projects that would have an unreasonable or major adverse impact on the environment of the host country. OPIC will conduct an environmental assessment of every project proposed for financing and insurance.
* OPIC is prohibited by statute from supporting projects that contribute to violations of internationally recognized worker rights. The investor must sign a contract with OPIC pledging to respect these rights, including the rights of association, collective bargaining and acceptable working conditions.
For additional information on OPIC programs in the New Independent States, contact:
James Gale
Overseas Private Investment Corporation
1100 New York Ave., NW
Washington, DC 20527-0001
Tel.: (202) 336-8629
Fax: (202) 408-5145
OPIC Web Site: http://www.opic.gov
This report is provided courtesy of the Business Information Service for the Newly Independent States (BISNIS)