Transcript Slide 1
Overseas Private Investment Corporation
ACEC 2014 Funding Investment in Africa
Iman Kennerly April 30, 2014
Our Organization
As the U.S. Government’s development finance institution, OPIC mobilizes U. S. private capital to help solve critical development challenges and in doing so, advances U.S. foreign policy.
Shading denotes OPIC-eligible countries
OPIC currently manages a $16.4B portfolio of projects in 103 countries and operates on a self-sustaining basis at no net cost to the American taxpayer.
OPIC’s Role in the USG OPIC’s Unique Position Foreign Policy
OPIC
U.S.
Private Sector International Development Administration Priorities
“We’re changing how we define development…we need to harness all the tools at our disposal—from our diplomacy to our trade and investment policies.”
~President Obama, 9/22/10 •
Support broad-based, sustainable economic growth
•
Proactively target specific countries, regions, sectors, and technologies
•
Mobilize private sector investment
•
Elevate development as a central pillar of national security policy
•
Advancing the development of U.S. clean energy companies
The U.S. Government’s Development Finance Institution 3
Our Solutions
OPIC offers innovative financial solutions to support private investors including debt financing, insurance, and support for private equity investment funds.
Products
Investment Finance
― Limited recourse, long-term finance for private sector, commercial projects ― ― Loan amounts up to $250M per project Specific programs for providing finance to small-and medium-sized enterprises
$18 $16 $14
Current Portfolio*
Based on a $29B Statutory Capacity
$16.4 Billion
$3.1 Insurance
Political Risk Insurance
― Protection against currency inconvertibility, expropriation and political violence, including terrorism ― ― Policy coverage up to $250M per project, up to 20 year term Fixed premium, cancellable only by insured
$12 $10 $8 $6 $4
$2.6 $10.7
Investment Funds Investment Finance
Investment Funds
― Senior debt for private equity funds selected by competitive process ― ― Investment decisions made independently by selected fund managers Provide up to $250M with bullet repayment, zero coupon structure
$2 $ Total Exposure *As of September 30, 2012
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Our Policy Standards
Investors and project proposals must satisfy certain policy criteria to receive OPIC financing and insurance.
Eligibility Criteria for Investors
To be eligible for OPIC financing and insurance, applicants must:
Policy Standards for Projects
OPIC supported projects must:
Contribute to
sustainable development
goals Have a
commercially viable business plan
successful track record and Be located in one of our
~160 eligible countries
Involve the U.S. private sector
in a meaningful way in the project seeking OPIC support Comply with international
environmental standards
Maintain
private sector control
(<50% government ownership) Support international
human rights
and
worker rights
regulations Cause
no loss of U.S. jobs
or adverse impact on the U.S. economy The U.S. Government’s Development Finance Institution 5
U.S. Connections in OPIC-Supported Projects
OPIC policy requires that finance and direct insurance projects have a meaningful connection to the U.S. private sector.
• •
How Does OPIC Define U.S.?
A U.S.-organized entity generally must be at least 25% U.S.-owned. A foreign organized entity generally must be at least majority U.S.-owned. • •
How Does OPIC Measure U.S. Involvement?
OPIC requires U.S. involvement in the project company in an amount that is equivalent to 25% of the project company’s equity, which may be met with equity, long-term debt or other U.S. contracts or, by combining these types of involvement. OPIC will support investment funds if the fund has raised U.S. equity equal to 25% of OPIC’s loan support or if the fund is managed by a U.S. manager. • •
How Does OPIC Measure the Duration of U.S. Involvement?
For an ongoing project, U.S. entities need to retain a 25% interest in the project through final disbursement of the OPIC loan. In the case of a start-up or ‘greenfield’ project, the U.S. entities need to retain a 25% interest through physical completion of the project. OPIC must approve any proposed transferee of the interest. • •
How Does OPIC Define U.S. Small Business?
For OPIC to finance a project with a direct loan, the US involvement must come from US small business. A “small” business includes: a business with annual revenues during the last fiscal year of less than $400M; entities/individuals without revenues, net worth of less than $100M. Consistent with the U.S. Small Business Administration, OPIC also considers a business with 500 or fewer employees as “small.” The U.S. Government’s Development Finance Institution 6
Our Impact
Over the past 41 years OPIC has supported over $200 billion of investment in developing markets that is projected to support over 277,000 U.S. jobs.
OPIC By the Numbers*
Total Investment Supported
$0 $50
$200 billion
$100 $150 $200
Success Stories
Haiti: $6 million loan to Haiti 360 to produce high-quality concrete to rebuild homes and other infrastructure destroyed in 2010 earthquake.
Total Projects Financed U.S. Exports Supported (Projected)
0 $0
4,000
1 000 2 000 3 000 4 000 5 000
$75 billion
$50 $100 India: $3.5M loan to Healthpoint for water treatment facilities serving 400 communities to help prevent disease.
[photo: Soma Vatsa/for NPR]
Iraq: $26M in financing to Claremont Erbil for affordable housing for hundreds of families in need.
U.S. Jobs Supported (Projected) *Since 1971
0
277,000
200 000 400 000 Ghana: $150 million in political risk insurance to Belstar for a project that will increase clean water access and make the country’s water treatment plants more efficient The U.S. Government’s Development Finance Institution 7
Investment Priorities
Renewable Resources Economic Opportunity in MENA Economic Opportunity in Strategic Priority Countries /Regions Impact Investing
Goal: Promote sustainable economic growth and meet the climate change challenge through clean energy investments and standards.
OPIC commitments in renewable resources have grown from under $10m in 2008 to $1.6 billion in 2012. Goal: Mobilize private sector investment essential for security, stability, economic growth and job creation in the region.
OPIC is halfway toward its public commitments to provide up to $2 billion in financing for private sector investment in MENA and $1 billion to support infrastructure and job creation in Egypt.
Goal: Create sustainable jobs and economic opportunity in key strategic regions including Afghanistan, Iraq, Pakistan, sub-Saharan Africa and SE Asia.
OPIC supports a robust portfolio of projects in key strategic countries by catalyzing investment in critical infrastructure and industries, expanding access to capital for SMEs, and creating much needed jobs.
Goal: Support and grow impact economy through investments that seek to have a social and/or environmental return as well as a financial return.
Over 85% of our investments from 2008 to 2011 were in Impact sectors, representing over $6.9 billion in new project commitments.
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Prioritizing Sub-Saharan Africa
OPIC has Increased its Support for African Investment
Since 1974, OPIC has committed over $8.5 billion in support of 476 projects in Sub-Saharan Africa countries.
In 2013, OPIC committed $640 million to projects in Sub-Saharan Africa, representing a more than five fold increase over 2008.
OPIC’s portfolio of active projects in Sub-Saharan Africa currently totals $3.9 billion across 119 projects and includes more than $769 million of support for targeted funds that invest across the continent in sectors such as infrastructure, microfinance, manufacturing, and services.
Projects in Sub-Saharan Africa now account for nearly a quarter of OPIC’s global portfolio, up from 6% a decade ago.
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Prioritizing Sub-Saharan Africa (cont’d)
Infrastructure and Related Sectors
OPIC’s Sub-Saharan initiatives and new projects focus on solutions in areas critical to Africa’s development, including financial services, infrastructure, renewable resources, and agriculture and food security.
OPIC is currently financing over $721 million for infrastructure projects in energy, construction, and housing. Sample projects include:
‒
$179 million in loans and political risk insurance to build a 100 MW “tri-fuel” power plant in the Republic of Togo, tripling Togo’s energy generation capacity and virtually ending the nation’s rolling blackouts. The project was also recognized as one of the Top 40 public-private partnerships of recent years by the International Finance Corporation and Infrastructure Journal.
‒
$37.8 million in political risk insurance to support the construction of three combined heat and power (CHP) plants in Nigeria for the Nigeria Bottling Company (NBC), an affiliate of a Coca-Cola brand distribution company. CHPs have energy efficiency as high as 90%, which is significantly better than the 35-40% efficiency of conventional gas-fired simple cycle power plants. One of the plants will also incorporate a carbon capture technology to trap and purify approximately 95% of the CO2 from the CHP’s flue gas. This CO2 can then be repurposed and used by NBC in their beverages or sold to companies who need food grade CO2. These innovative projects will promote energy efficiency, while lowering carbon emissions and also supporting local economic development.
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Geothermal in Kenya
$310M to Ormat Technologies (NV-based) for Expansion of an existing geothermal plant that
will double operating capacity and add clean energy to the country’s electricity grid in Kenya.
Project Description
Funding will enable the plant to double operating capacity and deliver at least 5% of Kenya’s total power demand. The geothermal plant (pictured) operates in Hell’s Gate National Park, a region abundant with hot springs, volcanoes and wildlife.
A pipeline transporting pressurized steam is elevated high above the ground to make way for giraffe migration.
Generates power using a proprietary technology that re-injects cooled water back into the reservoir to minimize the impact on the environment.
On the Ground
Overseas Private Investment Corp.
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Clean Water in Ghana
Insurance on $180M investment to refurbish and upgrade 45 drinking water treatment plants throughout Ghana.
Project Description
Implemented by Florida-based International Business and Trade, the Project will upgrade and improve more than half of the Ghana Water Company’s municipal water purification plants across all 10 of Ghana’s administrative regions A key component of Ghana’s efforts to meet Millennium Development Goal for water Ghana aims to provide clean water for 85% of its population by 2015, exceeding the MDG target Supports U.S. Government with Ghana under the Partnership for Growth program Financing will be raised through a bond issuance on the U.S. capital markets Overseas Private Investment Corp.
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Food Security in Ghana
Insurance on $119.5M investment to support modern agricultural development in Ghana.
Project Description
The Project will supply and install modern silos, warehouses, mills, abattoirs, livestock breeding facilities, market infrastructure, cold storage facilities and associated equipment in connection with Ghana’s national agricultural development strategy Will reduce post-harvest losses, improve production capacity and increase agricultural income, develop commercial agriculture infrastructure and improve food security Supports U.S. Government Feed the Future initiative and Partnership for Growth program Complements World Bank/USAID agriculture programs in Ghana.
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