Doing Business With OPIC

1. Doing Business With OPIC

2. OPIC’s Mission Statement “To mobilize and facilitate the participation of the United States capital and skills in the economic and social development of less developed countries and areas, and countries in transition from nonmarket and market economies, thereby complementing the development assistance objectives on the United States…”

3. OPIC • Small, independent U.S. government agency established in 1971 • Supports U.S. foreign direct investment in approximately 145 developing countries

4. OPIC Products • Finance • Political Risk Insurance • Investment Funds

5. Investor Eligibility • U.S. citizen • U.S. corporation or other organization, over 50% U.S. owned • Foreign corporation, over 95% U.S. owned • Foreign entity other than a corporation, 100% U.S. owned

6. General Eligibility Requirements • Project criteria: • New projects, expansions, privatizations • Private investment (limited foreign government participation, private sector management)

7. General Eligibility Requirement • Policy criteria • host country • developmental effects • no negative U.S. economic effect • environmentally sound • worker rights, human rights

8. OPIC Finance

9. OPIC FinanceWill Provide Senior Debtfor Your Project

10. Finance Program • Limited recourse project financing, up to: • 50% of project costs for new projects • 75% of costs of expansions • $100k to $250 million per project • Loan Terms: • amortization 3-15 years • market rates of interest • share collateral with other senior lenders • Corporate loan

11. Finance Program Criteria • Commercial viability • Track record / experience of sponsors • Reasonable leverage • Project completion support • Minimum 25% beneficial U.S. ownership • Balance sheet lending for corporate loan

12. Pre-operating expenses $ 2,000,000 Land 1,000,000 Construction 2,500,000 Equipment 4,000,000 Working capital 1,000,000 Total project costs $ 10,000,000 Sample Total Project Costs

13. Sample Financial Sources Equity U.S. Sponsor $ 1,250,000 Non-U.S. Sponsor $ 3,750,000 TOTAL $ 5,000,00050% Debt OPIC Loan $ 4,000,000 Other Debt $ 1,000,000 TOTAL $ 5,000,000 50% Total Capital $10,000,000 100%

14. OPIC Insurance

15. Insurance Program • Coverages • Currency Inconvertibility • Expropriation • Political Violence • Assets Coverage • Business Income Coverage • Up to 20 year term, rates fixed for life of contract

16. Insurance Summary • Inconvertibility Coverage • protects income and returns against blockage • Expropriation Coverage • protects net book value of insured investment • Political Violence Coverage • protects physical assets and replaces lost income

17. Expropriation - Compensation • Scheduled Payment in Default • Acceleration at OPIC’s option • Limitation - commercial default / realizable value of security

18. Political Violence Scope of Coverage • Violent Act with Political Objective • Direct and immediate cause of default • Default continues for 30 days Compensation • Amount of scheduled payment in default

19. Investment Funds

20. I - Overview: Goals and Needs Created as:1987 Administration Foreign Policy Initiative Created to: • Complement OPIC’s insurance and loan products • Address need for private equity in developing countries • Provide catalyst for private sector development

21. OPIC Private Equity Funds • OPIC Supports a family of 26 Private Equity funds targeting a variety of regions and sectors • Fund Managers are selected by a transparent process • Funds are capitalized by a OPIC guaranteed debt and private equity

22. OPIC’s Role in Your Investment OPIC Insurance OPIC Finance U.S. Banks U.S. Sponsor OPIC Supported Investment Fund Project Company Non-U.S. Banks Project Local Sponsor

23. Contact OPIC to discuss your project: WWW.OPIC.GOV or call (202) 336-8400