Overseas Private Investment Corporation (OPIC)

1.    Project Financing

OPIC is an agency of the United States Government

In response to the critical shortfall of private equity capital in developing countries, OPIC provides support for the creation of privately-owned and managed investment funds. These funds make direct equity and equity-related investments in new, expanding or privatizing emerging market companies. OPIC-supported funds assist emerging market economies to secure long-term growth capital, access management skills, and secure the financial expertise, all of which are key factors in expanding economic development.

OPIC-supported funds are among the largest providers of private equity capital to emerging markets. Since the inception of its investment funds program in 1987, OPIC’s funding commitments (as of FY 2009) have totaled $3.6 billion to more than 50 private equity funds. These funds in turn have invested $4.6 billion in over 470 privately-owned and managed companies, the vast majority of which are small and medium-sized entities, located across 53 developing countries that are eligible for OPIC support. The beneficial impact of OPIC’s credit support of funds that invest in companies is significantly greater than the amount of capital that OPIC contributes directly to the funds: private equity direct investment creates a multiplier effect as new capital attracts additional investment and financing in companies.

OPIC Project Financing Criteria
•    25% U.S.-ownership in the project company
•    A solid business plan
•    Sufficient equity
•    Financially and commercially-sound project producing an adequate cash flow
•    Track record of success in the same or similar industry
•    Proven technology

The Financing Amount
•    OPIC can provide direct loans from $100,000 to $250 million
•    Determine “Total Project Costs” –Hard costs: buildings, land, equipment – Soft costs: legal costs, design and architectural costs, financing costs
•    Determine an appropriate leverage for the deal (OPIC max is 75% of TPC)

Repayment
•    Loan terms 3-20 years, depending on:

  • Purpose of the loan
  • Projected cash flows

•    Quarterly or semi-annual payments
•    Grace period on principal
Cost of OPIC Financing
•    Cost of financing is based on an assessment of the risks. For OPIC, rate is:

  • U.S. Treasury rate (cost of funds)
  • Risk spread

•    Other costs include an upfront facility fee, commitment fees, and an annual maintenance fee.
•    Outside legal counsel and/or the services of experts or consultants of OPIC Financing

Prospective Projects of Interest
•    SMEs in need of smaller loan sizes
•    Deals in need of innovative structures relating to government, regulatory, or off-taker risks
•    Solar
•    Wind
•    Small hydro
•    Grid and non-grid
•    Biomass waste-to-energy
•    Clean Tech
•    Green Building
•    Energy efficiency projects

Contact:
Website: www.opic.gov
Direct Contact Finance Info:
•    email: Lynn.Tabernacki@opic.gov
•    Phone: 202-336-8502
Direct Contact Insurance Info:
•    email: Meredith.Baker@opic.gov
•    Phone: 202-336-8570

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