What is the Overseas Private
Investment Corporation?
The Overseas Private Investment Corporation (OPIC) is a self-sustaining federal agency that sells
investment services to small, medium and large American businesses expanding into
approximately 150 developing nations and
emerging markets around the world. Charging user-fees for its services, OPIC operates
at no net cost to the American taxpayer. OPICs political risk insurance, project
finance and investment funds fill a commercial void, create a level playing field for U.S.
businesses and support development in emerging economies. Since 1971, OPIC has supported
$150 billion
worth of investments that will generate $66 billion in U.S. exports and create
more than 257,000 American jobs.
When was OPIC established, and under
what branch of the federal government does it fall?
OPIC began operating in 1971. OPIC
is a small, independent agency in the executive branch of the federal government, and is
not an operating-arm of a larger agency.
How much support can OPIC offer any one project?
OPIC can offer up to $400 million in total project support
for any one project -- up to $250 million in project finance and up to
$250 million in
political risk insurance.
Who are OPICs clients, and how large is the client base?
OPIC clients are exclusively American companies.
OPIC does not provide direct government-to-
government aid or grants. Currently, OPIC has about 400 active clients
including small, medium and large U.S. businesses. Demand for OPIC services has increased,
in large measure, due to the demand for large scale private sector infrastructure projects
in the developing world. U.S. companies are well positioned to compete for new
infrastructure projects which have significant potential to increase U.S. exports and
create U.S. jobs. OPIC helps these companies compete with their foreign counterparts for
these export-intensive infrastructure projects. And, OPIC helps small U.S. businesses make
investments in new markets, offering the kind of individualized support that small
businesses need to bring their world-class goods and services abroad.
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What kind of financing does OPIC offer?
OPIC provides medium-to
long-term funding for new ventures or the expansion or modernization of existing,
successful ventures involving significant equity or management participation by U.S.
businesses. Rather than relying on foreign government guaranties, OPICs limited
recourse financing looks for repayment from revenues generated by the project. This allows
OPIC to finance projects in countries where conventional financial institutions often are
reluctant or unable to lend on such a basis. OPIC loan guaranties, used typically for
larger projects, range in size from $10 million to $250 million. OPIC direct loans,
reserved for projects involving U.S. small businesses and cooperatives, generally range
from $2 million to $30 million. OPIC carefully analyzes the economic, technical, marketing
and financial soundness of each project. There must be adequate cash flow to pay all
operational costs, to service all debt, and to provide the owners with an adequate return
on their investment.
How does OPIC support the U.S. economy?
Since
1971, OPIC has supported $150 billion of investments in the worlds emerging markets
and developing nations. These projects, sponsored by American businesses, will purchase an
estimated $66 billion in U.S. goods and services to export to their projects which will,
in turn, help to create and support more than 257,000 American jobs. Additionally, projects
supported by American businesses in the fastest growing economies in the world support
American global competitiveness and set U.S. standards worldwide. An OPIC-supported power
project in Indonesia, for example, is expected to buy more than $1 billion in U.S.
equipment and supplies and support more than 3,000 American jobs.
What role does OPIC play in U.S. foreign policy?
OPIC plays a
vital role in implementing Americas foreign policy objective of opening new
markets for U.S. businesses and assisting in the economic development of regions of the
world that are important to America. OPIC also harnesses private sector resources to
encourage democratic and market reforms around the globe. OPIC
projects have helped developing countries to generate over $11 billion in
host-government revenues and create over 690,000 host-country jobs.
Do other countries provide OPIC-like programs?
All G-8 nations and most developed
countries have OPIC-like national agencies providing similar products. Unlike OPIC, many
foreign programs are heavily-subsidized by their governments and are, therefore, not
self-sustaining. American businesses may purchase OPIC-like services from other
G-8
nations, but can only do so if they agree to purchase goods and services sourced in those
nations. OPIC services make it possible for American companies to buy U.S. goods made by
U.S. workers.
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