FOR IMMEDIATE RELEASE
Friday, May 24, 2002

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For further information, contact:
Lawrence Spinelli (202) 336-8690
Timothy Harwood (202) 336-8744

OPIC TO SUPPORT $100 MILLION RUSSIA-RELATED INVESTMENT FUND

President Bush makes announcement in Moscow

(Click here for Russia Private Equity Fund website.)

WASHINGTON, D.C. -- As President Bush announced today, the Overseas Private Investment Corporation (OPIC) intends to support a $100 million private equity fund to stimulate investment in Russia and surrounding regions. The president announced formation of the fund in Moscow, during his four-day trip to Russia. 

OPIC, which will contribute a loan of at least $33 million to the fund, has issued a call for proposals for a fund manager with a deadline of June 21.

OPIC President and CEO Dr. Peter Watson said the fund will enhance U.S.-Russia ties and contribute importantly to President Bush’s vision for accelerated economic growth in Russia and its neighboring states.

“This new, privately-owned investment fund will help provide long-term capital and critically-needed technology and management skills,” Dr. Watson said. “In this way, OPIC is supporting President Bush’s commitment to the economic development of Russia and its neighbors.”

OPIC currently supports eight private investment funds, with committed capital of $1.2 billion, which can invest in Russia and its neighboring states.  Those funds have already invested a total of $820 million in 142 enterprises.  Eurasia is comprised of the Republics of Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Ukraine and Uzbekistan.

A study recently commissioned by OPIC to determine supply and demand for private equity in Russia found an equity gap of $2.2 billion in 2003, which is projected to increase to $4.6 billion by 2007. 

Dr. Watson noted that the new fund will benefit from new internal controls, streamlined administration, a transparent and competitive selection process and a new leverage ratio that will both attract investment capital to Russia and provide an appropriate risk and return balance for the U.S. government.

OPIC-supported funds are limited to regions or sectors that have been identified as having particular needs for equity funding not being met by the private sector. The fund manager is expected to add value to the portfolio investments by providing management expertise, improved marketing, and access to international manufacturing technologies.

OPIC’s political risk insurance and financing help U.S. businesses of all sizes invest in 140 emerging markets and developing nations worldwide. Over the agency’s 30-year history, OPIC has supported $142 billion worth of investments that have helped developing countries to generate over $11 billion in host-government revenues and create over 673,000 host-country jobs. OPIC projects have also generated $64 billion in U.S. exports and create more than 253,000 American jobs.

OPIC was established as an independent agency of the U.S. government in 1971. It helps U.S. businesses invest overseas, fosters economic development in new and emerging markets, complements the private sector in managing risks associated with foreign direct investment, and supports U.S. foreign policy. Because OPIC charges market-based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers.

Over the agency’s 30-year history, OPIC has supported $142 billion worth of investments that have helped developing countries to generate over $11 billion in host-government revenues and create over 673,000 host-country jobs. OPIC projects have also generated $64 billion in U.S. exports and create more than 253,000 American jobs.