Overseas Private Investment Corporation International Trade Association of Greater Chicago March 16, 2005 Chicago, IL

1. Overseas Private Investment CorporationInternational 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)

2. OPIC’s 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

3. OPIC Priority Regions and Sectors • Mexico • Middle East and North Africa, including Afghanistan and Iraq • Sub-Saharan Africa • Small Business • Housing • Tsunami-affected reconstruction

4. 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

5. Basic OPIC Programs Facilitate U.S. investment and participation in projects by providing: • Political Risk Insurance • Project Finance • Investment Funds

6. Eligibility forOPICPrograms • Investor • Project • Investment • Country

7. 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

8. 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

9. Countryand Regional Focus • Active in Iraq, Afghanistan, Mexico, Central and Eastern Europe, and Eurasia • OPIC’s 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)

10. Investment Insurance: Protecting U.S. Investors from Real or Perceived Political Risks • Currency Inconvertibility • Expropriation • Political Violence, including Terrorism coverage

11. ExpropriationCoverage • Expropriation, nationalization or confiscation • “Creeping” expropriation

12. 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

13. 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

14. 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

15. 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

16. Structure of OPIC Finance Support OPIC Insurance OPIC Loan U.S. Sponsor U.S. Banks Project Company Local Financing Project Local Sponsor

17. OPIC Small Business Center --Overview Important Factors: • 60 daysfrom complete application to approval • U.S. business sponsor < $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

18. 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

19. 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)

20. 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 +1-202-408-5155 E-Mail: jmoran@opic.gov Internet: www.opic.gov